static2.vietstock.vnstatic2.vietstock.vn/vietstock/2017/7/4/20170526_20170524_SHS_A… · 04 05...
Transcript of static2.vietstock.vnstatic2.vietstock.vn/vietstock/2017/7/4/20170526_20170524_SHS_A… · 04 05...
0504
ANNUAL REPORT 2016
TABLE OF CONTENTS
Sứ mệnh, tầm nhin, giá trị cốt lõiThông điệp từ chủ tịch HĐQTMột số chỉ tiêu tài chính quan trọngQuá trình hình thành và phát triểncác giải thưởng đã đạt đượcNgành nghề kinh doanhCơ cấu tổ chứcĐịa bàn kinh doanh
GENERAL INFORMATION
06
74
28
112
45
142
64
147
PRINCIPAL BUSINESS ACTIVITIES
SUSTAINABILITY REPORT SHAREHOLDER RELATIONS FINANCIAL STATEMENTS
OVERVIEW 2016 - 2017 RISK MANAGEMENT
GOVERNANCE REPORT
Mission, Vision, Core valuesMedium & Long-term development strategyFinancial HighlightsMessage from the ChairmanCorporate MilestonesAwardsScopes of BusinessOperation NetworkOrganization Chart
07
08
10
12
16
20
22
24
26
148
151
153
158
161
166
167
144
145
146
146
76
88
102
114
117
122
137
138
30
33
35
39
40
Brokerage Financial services and treasuryFinancial advisory and Underwriting Principal investment
46
49
56
59
66
67
73
73
Report overviewSustainable growth orientation 2016 sustainable growth report2017 sustainable growth planCompliance announcement for GR4 based sustainable growth criteria
Shareholder structure, change in owners’ invested capitalSalary, bonus and incentivesTransactions of shares by internal and related partiesAgreements, transactions to internal and related parties
Report of the Board of General DirectorsIndependent Auditors’ Report Statement of financial positionIncome Statement Cash FlowsStatement of changes in equityNotes to Financial Statements
The WorldVietNamThe stock market and new policies in 2016Business Operation of securities companies and market shareOverview of 2017
Risk managementIdentifying risks in business activitiesLimitations on risk management in 2016Risk management plan for 2017
Report of Board of ManagementReport of Board of DirectorsReport of Supervisory Board
Assessments and analyses contained in this year annual report based on data prepared under accounting regime for securities companies under Circular 210/2014/TT- BTC by the MoF. The MoF issues Circular 334/2015/TT-BTC to amend Circular 210. However, Assessments and analyses contained in this report do not relect incorrectly the nature of business activities of the Company
0706
ANNUAL REPORT 2016
Maximizing return for shareholders
Contributing to the safe and sustainable development of Vietnam stock market
Creating a professional and lexible working environment as well as career opportunities for employees Cung cấp những dịch vụ tài chính, chứng Providing diversiied and qualiied inancial services to SHS’ clients and partners
Becoming a leading securities company that operates multi-functionally in accordance with investment banking model
Being the prestige securities trademark in Asia Stock Market
We are proud that individual excellence and professionalism make a great contribution to the SHS’s power
Innovative ideas help us solve problems more effectively, enhancing service’s quality and getting closer to clients
Integrity including conidentiality, honesty and trust are the basis of our credibility and reputation
We believe that SHS can always ind ways to serve customers better. We’re grateful and always listen to feedback for self-improvement
INTEGRITY
CREATIVITY
CUSTOMER’S SATISFACTION
PROFESSIONALISM
VISION
MISSION
CORE VALUES
GENERAL INFORMATION
0908
ANNUAL REPORT 2016
MEDIUM AND LONG-TERM DEVELOPMENT
STRATEGY
GENERAL INFORMATION
STRATEGY FOR CORPORATE FINANCIAL ADVISORY
STRATEGY FOR SECURITIES BROKERAGE
GENERAL STRATEGY
STRATEGY FOR TREASURY
STRATEGY FOR PROPRIETARY TRADING
STRATEGY FOR CORPORATE GOVERNANCE
To maintain the Company’s presence in Top 5 securities companies that have largest brokerage market share in both stock exchanges. Increasing net asset value of our customers is our ultimate motivation. Besides, we concentrate on enhancing quality of our customer services and investment consulting by using modern, convenient, user-friendly technology and comprehensive risk management system
To develop equally all business segments of a full service securities company in which brokerage and corporate financial advisory activities are core foundation
To restructure investment portfolio by weighting more proportion on long-term investments in companies that have good foundation and sustainable growth while reducing short-
term investments.
To use equitization advisory as the first step to do business with enterprises, then provide them with more investment banking services that have high level of intelligence and value added such as underwriting, M&A, corporate restructuring. With that, SHS hopes to position itself as one of leading corporate financial advisories and
securities brokerages in Vietnam
To diversify cooperation channels and be financially self-sufficient by raising the Company’s equity step by step
To improve corporate governance model with strategic directions based on best modern governance rules
1110
ANNUAL REPORT 2016
FINANCIAL HIGHLIGHT
BUSINESS RESULTS EFFICIENCY RATIOS
BALANCE SHEET
2015 2015
2015
2014 2014
2014
2016 2016
2016
Net revenue
Operating income
Other income
Income before tax
Income after tax
Asset turnover
Proitability
ROA
ROE
PAT/ chartered capital
Proit margin
EPS
Capital adequacy ratio as of 31/12
As of 31/12
Total assets
Liabilities
Equity
Chartered capital
Outstanding shares
399,770
122,031
63
122,094
122,094
13%
4%
13%
12%
31%
1,223
217.43%
3,172,970
2,265,171
907,798
1,000,000
99,845,000
563,338
86,546
43
86,589
86,589
17%
3%
8%
9%
15%
865.62
236.68%
3,314,377
2,200,891
1,113,485
1,000,000
100,000,000
518,759
118,463
-225
118,238
118,238
15%
4%
12%
12%
23%
1,182
231.01%
3,360,471
2,332,575
1,027,896
1,000,0000
100,000,000
unit: million vnd unit: million vnd unit: million vnd
NET REVENUE INCOME BEFORE TAX TOTAL ASSETS/ CHARTERED CAPITAL
CHARTERED CAPITAL TOTAL ASSETS
3,172,970
3,360,471
3,314,377
1,000,000
1,000,000
1,000,000
13
ANNUAL REPORT 2016
MESSAGE FROM THE CHAIMAN OF BOARD OF
DIRECTORS
We are open to new business
opportunities with the established strategies from
2016.
GENERAL INFORMATION
Dear Valued Shareholders, Investors and Clients!
As always, it is my pleasure to share with you my personal view
and Board of Directors’ view on SHS operation performance
and its related concerns hereof with a special pride and
enthusiasm.
I would like to start this Message not from the Company’s
inancial igures but from recalling some key points in my
Message last year, which are focusing on “growth quality”
rather than “the speed of growth”,. You shall ind out that such
directions are thoroughly demonstrated in each segment of
the Company as I mention hereunder.
For the business performance, total revenue reached VND
565.96 billion, equivalent to 108.3% of the 2016 target.
The Company’s pretax proit achieved VND 86.589 billion.
Regardless of the provision of the investment in SHB shares,
SHS would successfully meet 120% of target plan announced
in the Annual General Shareholders Meeting.
At irst glance, 2016 was seemingly an impressive year for
Vietnam stock market with market liquidity hiting VND2,936
billion/ trading session, up by 18.34%. VN-Index on 31st
December 2016 rose to 664.87 points or an increase of
14.82% from 2015. However, in fact, in 2016 the stock market
was extremely unpredictable. A series of unprecedented risks
appeared, posing big challenges for inancial services such as
margin lending. Many stocks plunged continuously, resulting in
clients’s insolvency for margin loans offered by the securities
companies, leading to non-performing debts incurred by these
companies.
In such context, we are proud that SHS is one of the best
risk managing securities companies on the stock market, in
contrast to the negative prejudices from investors and clients. In
order to obtain such achievement, as set forth in the strategy,
we were struggling to sacriice the growth rate of brokerage
of 21% in 2015 for that of 2% in 2016 to rebuild a more
stable and convenient operation system, a more powerful and
effective customer base and a successful upgrading of risk
management system. Although SHS’s growth rate of brokerage
revenue was lower than that of other competitors namedly SSI,
HSC, VCSC, etc., the market share in Q4/2016 in unveiled that:
a Top 5 position on HOSE with 5.98% market share and Top
1 position on HNX with 10.6% market share, SHS successfully
maintains its competitiveness and strong position on Vietnam
Stock market, regardless of inluence from the restructuring
of the stock market in the irst half of 2016.
Same story went for corporate inance advisory, the Company’s
achievements and effort in the year were not fully relected
by accounting numbers. Although the target plan was not
successfully fulilled, the number of signed contracts in the
year reached 100 contracts. Revenue of corporate inance
advisory obtained VND14.6 billion, equivalent to the value in
2015; though, the average revenue per contract increased by
25%. It is noted that in the corporate inance advisory revenue
structure, operating revenue from contracts that requires highly
sophiscated techniques and knowledge such as corporate
inance restructuring, equitization and State divestment
advisory service was sharply increased. Particularly, we are
proud to be the sole advisor of the year’s biggest equitization
deal on the stock market: IPO of VEAM with successful auction
rate up to 90%, obtaining approximately USD 100 million. We
strongly believe that with the qualiied, large size and highly
complicated deals consulted by SHS recently, its prestige and
position in this ield have been signiicantly improved in the
hearts of investors, especially institutional ones.
In 2016, we dedicated lots of time and effort on restructuring
the investment portfolio. Consequently, investment activities
in the year were relatively restricted, with limited negative
impact of the provisions. In return, a condensed and balanced
portfolio was achieved. We managed to allocate capital to
unlisted companies which possess eicient core businesses,
good competitive advantages, growth potential, attractive
valuation and plan to get listed in the near future we expect
that these would deliver sizable proits in 2017 and in
coming years. For the investments in listed companies, the
decisive divestments had been applied for the non-performing
investments in order to focus the resources on more intensive
and effective disbursements. These strategic moves will
promisingly “blossom” in 2017.
1514
ANNUAL REPORT 2016GENERAL INFORMATION
Nevertheless, there were still many activities falling behind
schedule in 2016. The replacement of the current core trading
system not as aggressive as scheduled in the beginning of
the year, although the current core trading system has been
upgraded, remarkably improving stability and utility. Moreover,
the proposal for replacing the compensation scheme and
the operation organization of the brokerage division were
not completed, dragging the deployment of brokerage
business expansion plan down. The evaluation procedure
for each operation segment existed but not as detailed as
the advanced business models. We understand that in the
increasingly ierce competition among securities companies,
all above matters shall be completely solved in 2017 for SHS
to maintain its ambition and position Following the growth
momentum of the stock market from the end of 2016, I
believe 2017 will be another successful year of Vietnam stock
market even challenges and opportunities are still interlinked.
Risks arising from the world politic turbulence such as result
of elections held in Germany, France or the US’s decision on
withdrawing TPP, inluence of FED’s interest rate hikes, which
pose challenges on global money lows, etc., shall be the key
factors leading to potential risks to the Vietnam stock market.
On the bright side, many internal and external factors are
seen to positively affect the market. The consensus among
OPEC members in cutting down the output, pulling crude
oil price out of decreasing cycle shall facilitate the recovery
of oil and gas industry and oil and gas stock prices on
Vietnam stock market. On macroeconomics, the concrete,
bold and practical policies of the “Government for creation
and service” will create greater conidence and momentum
for economic growth, with signiicant driving force coming
from the private sector.
A series of giant corporations have been and will be listed
such as: Vietjet Air, Novaland, Thaco, Sabeco, Petrolimex,
etc., facilitating an increase in size of market capitalization.
Plans to launch new products such as derivatives, to shortern
settlement cycle if materialized early will facilitate market
liquidity improvement, and increase chances of upgrading
Vietnam stock market from a frontier market to an emerging
market, so that Vietnam will attract more foreign investment
inlows. However, not all securities companies may take
advantage of and beneit from such positive factors.
Ladies and gentlemen, in 2017 we are open to new business
opportunities with the established strategies from 2016.
Brokerage business still plays the key role in the whole
company’s business, functioning as the reliable backbone
for the Company’s development. Brokerage team is expected
to be prudently and properly sized up under a new brokerage
policy on commission but the same old principle: “taking the
client’s growth of net asset value as the drive”. Corporate
inance advisory shall closely be associated with the policy of
capital divestment from SOEs as speciied by the Government,
focusing on large and high quality enterprises to improve
the Company’s prestige, thereby launching sophiscated, high
value added deals to improve the eiciency of corporate
inance advisory operation. In 2017 we shall be specially
focus on improving the corporate governance quality and
performance of the entire system.
2017 is acknowledged as a special year for SHS, celebrating
its 10th anniversary. With 10 years of experience, we strongly
believe that no one but its empoyees is the most precious
asset of the Company. It is them who have developed SHS’
culture on the basis of trust, responsibility, a can-do spirit and
are people who help SHS obtain sustainable development.
Therefore, Board of Directors and I completely put our entire
trust on Board of Management as well as our beloved
employees. Hopefully, such view should be shared by the
entire shareholders. We strongly believe that SHS is on its
right track, conidently sailing to the big ocean in order to
deserve your expectations, supports and accompanies.
Wish you a great year of 2017, good health, happiness, luck
and success on the stock market!
On the behalf of Board of Directors
The Chairman
Do Quang Hien
1716
ANNUAL REPORT 2016
CORPORATE MILESTONES
GENERAL INFORMATION
Established after receiving Certiicate of Business Registration No. 66/UBCK-GP issued by SSC with
initial capital of VND350 billion
Became a member of Vietnam Securities Depository Center (VSD) in accordance with Decision No. 71/
GCNTVLK
Became oicial member of Ho Chi Minh Securities Exchange (HSX) and Ha Noi Securities Center (Ha
Noi Securities Exchange (HNX) nowadays).
Established Da Nang Branch under Decision No.611/QD-UBCK issued by SSC.
Oicially listed on Ha Noi Securities Center (Ha Noi Securities Exchange (HNX) nowadays) in accordance with Decision No. 245/QD-TTGDHN
under stock ticker SHS
Increased charter capital to VND410,629,960,000 by issuing bonus shares
First trading day of SHS on HNXEstablished Ho Chi Minh Branch under Decision No. 320/QD-UBCK issued by State Securities
Commission
Opened new head oice at 1st and 5th Floor, Dao Duy Anh Building, 9 Dao Duy Anh St, Dong
Da District, Hanoi
15/11/2007
29/11/2007
15/02/2008
16/02
06/05
17/06
25/06
21/09
05/05/2008
Become a trading member for specialized government bonds
Opened new head office under Decision No. 62/GPĐC-UBCK of SSC at 1st& 3rd floor, Trade-Union Conference Center, No.1, Yet Kieu, Hoan
Kiem, Hanoi
Increased charter capital to VND 1,000,000,000,00018/05 23/11
30/09
1918
ANNUAL REPORT 2016GENERAL INFORMATION
Ho Chi Minh City branch moved to new address at 3rd loor, Artex Sai Gon building, 236-238 Nguyen Cong Tru, Nguyen Thai Binh Ward, District 1, HCMC according to Decision No. 189/QD-UBCKNN dated
04/04/2013 issued by SSC
Changed head oice to Floor 3th, Trade-union Conference Center Building, 01, Yet Kieu Ward, Hoan Kiem District, Hanoi according to Amending License No.23/GPDC-UBCK dated 29/05/2013
issued by SSC
Established Thang Long Transaction Oice in accordance with Decision No.662/QD-UBCK issued by SSC Floor 3th, M5 Building, 91 Nguyen Chi Thanh St, Lang Ha Ward, Dong Da District,
Hanoi
SHS is one of Top 10 securities companies which have largest market share for securities brokerage
in Vietnam on both HSX and HNX
04/04 05/09
12/201430/05
SHS is one of Top 5 securities companies which have largest market share for securities brokerage in Vietnam on both HSX and HNX
Established Dong Nai Representative Oice at No. 129 Ha Huy Giap, Quyet Thang Ward, Bien Hoa City, Dong Nai Province under the Decision No. 1148/QD-UBCK of State Securities
Commission
Maintained its position in Top 5 securities companies with largest securities brokerage
market share in both HNX and HSX alone
10/201612/2015
Q4/2016
2120
ANNUAL REPORT 2016
AWARDS
Certiicate of Vietnam famous brand
name 2014 awarded by Vietnam Intellectual Property Association and Vietnam Union of Science and Technology Associations.
Top Hanoi gold Entrepreneur,
Business in 2015 awarded by the Association of Hanoi Small and Medium Enterprises.
Securities company with Best IR
activity, which was surveyed and voted by Tai Viet Communication Group.
Securities company with best
securities brokerage, which was organized and voted by VCCI
Top securities companies period
2005 – 2015 awarded by HNX.
Certiicate of merit for great
contribution to the development
of State Securities Commission in
the period of 1996 – 2016 awarded by State Securities Commission.
Top Equitization and Divestment
Consultants in 2015 in the annual
M&A Forum organized by the Vietnam Investment Review
Certiicate of merit for great
achievement in 2016 emulation
movement launched by the
Association of Hanoi Small and
Medium Enterprises and awarded by the Chairman of Hanoi People’s CommitteeTop 50 best annual reports by
Hochiminh Stock Exchange and the Investment Review.
2322
ANNUAL REPORT 2016
SCOPES OF BUSINESS
INVESTMENT CONSULTINGProvide daily call reports
Provide research reports (macro reports, investment advisory reports, industry research report, company reports, stock
valuation reports)
Corporate access: company visits, seminars to introduce investment opportunities to Vietnam
CORPORATE FINANCE ADVISORY
SECURITIES UNDERWRITING
Capital raising (private placement and public issuance)
Listing and IPO
Equitization
Corporate ownership change
Divestiture and share auction
Corporate inancing restructuring
M&A
Others (organize Annual General Meeting, information disclosure, prepare annual report, register public company, transaction registration, manage shareholder books,
raise capital, etc.)
Securities underwriting with different type of commitments (irm commitment, best effort, etc.)
GENERAL INFORMATION
SECURITIES BROKERAGEBroker various kinds of securities (stocks, bonds…), listed and
unlisted securities including :
1. Open securities trading accounts (at SHS, via online)
2. Place buy/sell orders, advanced buy/sell orders through different channels (at SHS, via mobile, fax, online trading tools:
SHWEB, SHMobile, SHPRO...)
3. Online banking for money transactions
4. Notify trading result via SMS
5. Notify matching orders results and securities account statements via email
6. Provide information such as trading accounts, stocks, companies
7. Monitor real-time account values, proit/loss of investor’s holdings
8. Hotline customer service
9. Undertake entrusted management of individual investor’s trading accounts
10. Auction and shares auction agent...
SECURITIES CUSTODY & SHAREHOLDER BOOK MANAGEMENT
FINANCIAL SERVICESReceive sales proceeds for investors
Margin lending
Cooperate with banks to support securities trading
Securities depository and re-depository
Corporate actions for shareholdersManage shareholder books (support for unlisted stocks transactions and
corporate actions for shareholders)......
2524
ANNUAL REPORT 2016
The Company’s operation network spreads across Vietnam. Head Oice, Branches, Transaction Oices are mainly located in big cities.
LOCATION
GENERAL INFORMATION
Address: 3th Floor, Trade-union Conference Center Building, No.1, Yet Kieu, HoanKiem, Ha Noi.Phone number: 84-4-38181 888 Fax: 84-4-38181 688Email: [email protected]: http://www.shs.com.vn
HEAD OFFICE
Address: 3th Floor, Artex Sai Gon Building.No. 236-238, Nguyen Cong Tru, Nguyen Thai Binh, District 1, Tp. HCMPhone number: 84-8-3945 1368Fax: 84-8-3915 1369Email: [email protected]
Address: No. 97, Le Loi, Hai Chau, Da Nang.Phone number: 84-511 3525 777Fax: 84-511 3523 779Email: [email protected]
Address: 3th Floor, M5 Building.No. 91, Nguyen Chi Thanh, Dong Da, Ha Noi.Phone number: 84-4 3269 6666Fax: 84-4 3291 9999Email: [email protected]
Address: No. 129, Ha Huy Giap, Quyet Thang, Tp. Bien Hoa, Dong NaiPhone number: 06 1381 9989
TP.HCM BRANCH
DA NANG BRANCH
THANG LONG TRANSACTION
OFFICE
DONG NAI BRANCH
2726
ANNUAL REPORT 2016
ORGANIZATION CHART
GENERAL SHAREHOLDERS
SUPERVISORY BOARD
BOARD OF MANAGEMENT
INTERNAL AUDIT
DIVISION
BOARD OF DIRECTORS
BOD OFFICE
GENERAL INFORMATION
SECURITIES BROKERAGE CENTER
CORPORATECOMMUNICATION
INFORMATION TECHNOLOGY
ADMINIS-TRATION
RESEARCH
FINANCIAL SERVICES
INVESTMENT
TREASURY
FINANCIAL ADVISORY AND UNDERWRITING
THANG LONG TRANS-ACTION OFFICE
HO CHI MINH BRANCH
DA NANG BRANCH
DONG NAI REPRE-SENTATIVE OFFICE
FINANCE AND ACCOUNTING
LEGAL AND RISK MANAGEMENT
OVERVIEW2016 - 2017
30333539
40
The World
VietNam and new policies in 2016
The stock market
Business operation of securities companies and market share
Overview of 2017
3130
ANNUAL REPORT 2016
THE WORLD ECONOMY
DONALD J. TRUMP WON THE US PRESIDENTIAL ELECTION
BREXIT - A TURMOIL FOR THE GLOBAL FINANCIAL MARKETS
FED HIKED RATES
The world economic growth rate in 2016 dropped to 3.2% from 3.1% in 2015. Enduringly unresolved and weak
growth rate in some countries has driven the world economy’s recovery below expectation, instable and unbalanced.
Market around the world experienced a turbulence when Brexit, known as the divorce between the UK and the EU after a 43 year marriage. In the short run, Black Friday 24 June 2016 was the darkest day since the 2008 crisis with a USD 3,000 billion capitalization running out of global markets. In the long run, Brexit might impose negative effect on economic growth rate in major regions.
Politically, Brexit may be seen as a precedence for left wing parties to take power in coming terms in the EU and the zone is going to be more divided. With the UK and the EU together accounting for 22% of the world GDP, combination of Brexit and political turmoil in the EU makes problems bigger, more complicated and unpredictable.
FED hiked rates the irst time in 2016 in mid-December; benchmark rate increased by 0.25%. Thus, overnight funds rate is target in 0.5-0.75% range. Despite problems of the global economy, the US economy is strongly recovering and approaching goals proposed by Fed. Averagely in 2016, there were 180.000 new jobs created monthly, unemployment rate dropped to 4.6% in November (the lowest in 9 consecutive years). Inlation rate touched the 2% target of Fed. Notably, FOMC was expecting to raise the number of rate hikes to 3 in 2017, 2 in 2018 and 3 in 2019.
In the Asia region, a drop in export value will make the region’s GDP down by 0.2%. India and Malaysia are the most possibly exposed to the slowdown risk. Also, GDP growth rate of Japan faces a strengthening JPY as a light for quality asset.
In the UK, it may take 2 years to disengage the EU with negotiations on trade and economic policies. GDP per capita in the UK is forecast to decrease by 1.3-2.6 % by 2020, GDP might be down by GBP 100 billion and unemployment rate is likely to increase to 3%. The UK’s exports will decelerate without member advantage in the EU market.
The EU and the Eurozone may face the risk that France, founding member and a pillar of the Eurozone considers an exit following the Brexit case.
In a recent survey by Pew Research in France, only 30% of correspondents are conident of remaining in the EU. The number is even that of the UK before the Brexit poll.
OVERVIEW 2016 - 2017
Seizing 304 electoral votes, billionaire Donal J. Trump won the presidential election on 8 November 2016, becoming the 45th president of the US. Stock markets around the world reacted positively to his victory, easing concerns about a dismal outlook of the US and the world economies during the presidential campaign of the candidates. DJIA jumped to the record high above 20,000 points with investors expecting a higher economic growth rate thanks to the President’s sound policies.
Immediately after taking oice, President Trump signed an executive order to withdraw from the Trans-Paciic Partnership with the aim of restructuring the US economy, focusing buy American, and using Amecican labor. The TPP withdrawal of the US was not coming as a shock since it had been planned in the presidential campaign of Donald Trump. In fact, the most affected by the TPP withdrawal of the US were developed countries like Japan, Australia while it is less distressing Vietnam whose major exports to the US are necessary goods, agricultural produce, and seafood.
3332
ANNUAL REPORT 2016
GLOBAL STOCK MARKETS
Almost global stock markets experienced a positive year, except Japanese market rallied just 13% yoy, the rest gained at least a 20% growth yoy. The US stock market poised to be one of the best with DJIA and NASDAQ repeatedly breaking record highs.
THE RECOVERY OF OIL PRICES ECONOMY
Oil prices strongly recovered above USD 55 per barrel after hitting trough at USD 30 USD per barrel in January 2016. IAEA raised its forecast on the world’s oil demand, in which IAEA adjusted its estimate on China’s daily demand to 1.4 million of barrels up by 120.000 barrels. Currently, Abu Dhabi Zakum Oil Company of Abu Dhabi announced to cut Murban and Upper Zakum oil supply by 5%, Das oil by more than 3%. The Petroleum Corporation of Kuwait also said to slash half of crude oil supply contracted in January. Meanwhile, China’s crude oil demand sharply recovered from trough. Crude oil demand in India increased by 12.1% yoy to 16.64 million tons in December 2016.
GDP growth rate in 2016 was 6.21%. 2016 GDP growth rate was 6.21%, lower than the Government’s target at 6.7% and below the rate reported to the National Assembly at 6.3% - 6.5%. Negative growth in agricultural, forestry, aquaculture sectors and plunging oil prices accounted for the missing target. Major contributors to GDP growth were construction – civil engineering ( up by 7.57%), services (up by 6.89%). Due to natural calamity, looding and drought, the agricultural sector made up of just 1.36% in GDP. Flooding in the Middle alone made GDP growth rate decline by 0.3%.
CPI in December 2016 rose by 0.23% mom, headline CPI was up by 4.74% yoy. Core inlation climbed just 2.66%, far below the 5% target of the Government.
By 26 December 2016, total FDI disbursement was USD 15.8 billion, increasing by 9%; total registered FDI was USD 24.372 billion. Apparently FDI attraction was the key point in the economy in 2016.
VIETNAM
Inflation reined below 5%
Successful FDI attraction
Stable interest rates, steady credit growth
OVERVIEW 2016 - 2017
Credit growth was 18.71%, capital mobilization growth was 16.88% Strain in the interbank market was absent with interbank rates luctuating a little bit in year ending months around 4.1%-4.75%/ year for some terms. Lending rates were 6%-7% for short term loans, 9%-10% for middle term loans and 9%-10% for long-term loans respectively.
In 2016, the number of listed SOEs increased by 20 to 691 companies in the two bourses, compared to 2015 new listed SOEs in 2016 decreased by 60%. However, SOEs tended to trade on Upcom with approximately 120 new listings by 31 December 2016.
Restructuring of SOEs
3534
ANNUAL REPORT 2016
FTA between Vietnam and Euro-Asia Economic Union which is made up of Armenia, Belarus, Kazakhstan, Russia and Kyrgyzstan oicially takes effect. Under which, Vietnam lifts import taxes for 59% of EAEU goods including meat, wheat, alcohol, mechanical equipment, steel and garment products. Equally, taxes on 30% of other goods will be reduced to 0% in the interim period. Especially, 90% of tax lines on seafood, texile and garment and leather products are in the pipeline to 0%, paving the way for Vietnamese goods to access a market with more than 183 million people.
The market experienced a successful year, at least in terms of score. VNIndex conquered the 640 point threshold in the last few years; VNIndex closed the year at 664.87 points equivalent to a 15% increase yoy while HNXIndex closed the year at 80.12 points equivalent to 0.2% increase yoy. There are a number of key impacts on the stock market as follows
In 2016, thanks to the central FX rate mechanism of the SBV, VND devaluated just 1%-2%, compared to 2%-5% devaluation in previous years. Also, with more than 40 billion USD reserve, SBV was more lexible to deal with FX rate luctuation as Fed hiked rates in mid December 2016 as planned.
In 2016, total export value was USD 175.9 billion, total import value was USD 173.3 billion, translating to a net surplus of USD 2.68 billion.
Vietnam is faced with public debt challenge. Public debt 2016 rose to 64% of GDP, touching the public debt celling of 65%. The consequence is repeated budget deicit, causing Vietnam to use debt to repay debt and offset budget deicit.
Current non performing loan ratio of credit organizations was set to 3% as required by the Government. However, bad debt restructuring was not positive as expected; in terms of quantity it sounds good but not good enough in terms of quality.
New trade agreements signed
Steadier FX rate
Continued trade surplus
Surging and alarming public debt
Bad debt restructuring stands still
THE STOCK MARKET AND NEW POLICIES IN 2016
FIRST QUARTER: Support news from Fed’s decision not to hike rates in Q1 and to lessen possibility of raising rates in the whole year in a FOMC meeting on 15-16 March due to instability of the world economy and inancial markets partly backed the rally of Vietnam’s stock market. VNIndex created trough in late January around 520 points and turned back to 580 points. However, the introduction of Circular 07 regulating new requirements for margin loans stalled temporarily the rally.
QUARTER 2: The market was still in a strong rally with closing the quarter at 630 points or a 70 point increase in one quarter. “Sell in May” phenomenon was proven untrue with the market as a series of blue chips pulling the market up. Money lowed steadily to the stock market thanks to intervention policies of the SBV to support business activity growth. The market also attracted P-notes capital to offset withdrawal by ETFs and VIC convertible bond. The market just corrected sharply with Brexit shock but immediately recovered, seizing all the losses and inally break 640 points in the second half of July.
QUARTER 3: The market was still in a long and strong rally, in this period, the restructuring of ETFs ended and investor psychology was excited again. However, facing huge proit taking activities of investors VNIndex failed to conquer the 8 year high. At the end of the quarter, net sell of foreign investors helped alleviate anxieties on the market and the common thinking was to look forward positive Q3 and Q4 business results of leading stocks.
QUARTER 4: After forming 690 point high, the market came into the consolidation phase in the irst half quarter with VNIndex correcting to 650 points, affected by some key events such as: Donald J. Trump winning the Presidential election, Fed’s decision to raise rates in Mid December. However, demand at 650 points of VNIndex was quite strong, pushing the market up again and VNIndex closed the quarter above 660 points.
OVERVIEW 2016 - 2017
3736
ANNUAL REPORT 2016
DATA STATISTIC OF THE MARKET 2015 2016 2015 VS 2016
Market capitalization (VND million billion)
Market cap / GDP
Number of stock accounts (million)
Mobilized capital (VNDthousand billion)
Total listed shares and fund cetiicates
1,298
30,97%
1,5
283
682
1,765
42%
1,67
348
695
36%
36%
11,3%
23%
1,9%
Liquidity of the market in 2016 was radically improved compared to 2015 with average trading value per trading day reaching VND 2,950 billion. Particularly, in July and September trading values peaked around VND 3,500 billion per trading day in contrast to trading value in year beginning months which averaged VND 2,300-2,400 per trading day. Nevertherless, there were some trading sessions with transacted values higher than VND 4,000 billion and 5 trading sessions with transacted values above VND 5,000 billion.
In 2016, classiied as the 1st grade sector, telecommunications shares ranked 1st with a 74% growth, followed by pharmaceuticals and medical shares with 60% growth. In December, telecommunications share continued to rank 1st position with 15% growth. Besides, there emerged FMCG shares with average 5% growth while shares of other industries experienced negative growth.
Net sales of foreign investors is demonstrated in below chart, in 2016 foreign investors’s net selling value was VND 6,731 billion despite VNIndex rallied by more than 17% compared to 2015. Except for their net buy in May – July, foregin investors kept selling strongly in the rest months. VNM and HPG were two of the most sold of foreign investors, notably due to capital withdrawal by ETFs such as Db x-trackers FTSE Vietnam ETF and VanEck Vectors Vietnam ETF.
Share bidding felt below expectation. According to data statistics, in the irst 11 months of 2016, there were 481 million shares offered on HNX with total value of VND 6,500 billion. In comparison, the number of offered shares far surpassed in 2015 but bidding value rose a little bit.
Total transaction value
Foreign investors’ transaction value Foreign investors’ transaction value
Average transaction value
vn-index vn-index
Source: Compiled by SHS
1,500 1,500800
1,000 1,000700
500 500600
- -500
(500) (500)400
(1,000) (1,000)300(1,500) (1,500)
200(2,000) (2,000)
100(2,500) (2,500)
0(3,000) (3,000)
% change in 1 month % change – YTD
104
102
100
98
96
94
92
90
88
OVERVIEW 2016 - 2017
3938
ANNUAL REPORT 2016OVERVIEW 2016 - 2017
By the end of 2016, the number of securities with normal operation is 79, down by 25% versus 2015. The number of fund management companies with normal operation is 46, these fund management companies possess a VND 3,785 billion chartered capital and manage more than VND 146 thousand billion up by 17.7% yoy. The number of public funds rises signiicantly, especially open ended funds.
Competitive pressure among securities companies is increasing, there was no change in position of top 3 securities companies with SSI holding the biggest market share of stock and fund certiicate brokerage, followed by HSC. In 2016, top 10 welcomed KIS Vietnam which replaced BVSC. With its impressive momentum, SHS ranked 5th on HSX and ranked 4th on HNX in terms of brokerage market share.
CTCK CTCK
HNX MARKET SHAREHSX MARKET SHARE
2016 2016RANKING2016
RANKING2016
SSI
VNDS
SHS
HSC
MBS
KIS
ACBS
VCSC
TVSI
MSI
SSI
HSC
VCSC
VNDS
SHS
MBS
ACBS
FPTS
BSC
KIS
11.03%
9.35%
7.94%
6.78%
5.60%
4.66%
4.07%
3.79%
3.70%
357%
13.69%
12.45%
8.86%
6.12%
4.25%
5.69%
4.09%
3.65%
4.19%
3.87%
1
2
3
4
5
6
7
8
9
10
1
2
3
4
6
5
8
10
7
9
MARKET SHARE
Policies issued in 2016
The regulation stipulating settlement and clearing takes effect on 1 January 2016. Under the Decision 211/QD-VSD, settlement and clearing period for stocks, fund certiicates is T+2 and settlement and clearing period for bond is T+1
Circular 155/2015/TT-BTC guiding information release on the stock market takes effect 1 January 2016, this Circular expands information release objectives that were regulated under Circular 52/2012/ TT-BTC
Taking effect from 1/11/2016, Circular 115/2016/TT-BTC amends and adjoin somes clauses of Circular 196/2011/TT-BTC guiding IPO process, management, use of money from equitization of 100% state owned enterprises. The difference between the two Circulars is shares after IPO will be automatically registerd to Upcom listing and period of time to list shares is signiicantly shortened through automatic listing registration mechanism is attached in IPO subscription form.
Circular 180/2015/TT-BTC guiding stock trading subcripstion for non listed shares takes effect from 1 January 2016. This Circular stipulates that within 01 years from the effective date, shares of all public companies and shares withdrawn from listing by the effective date must complete Upcom trading registrating.
Circular 197/2015/TT-BTC stipulating securities business conditions, taking effect from 25 January 2016. This Circular provides new adjustments in compliance with provisions under Enterprise Law 2014 and Decree 60/ND – CP which compliments some clauses of Decree 58 guiding common practice of Securities Law and meets the market’s practical conditions.
Circular 203/2015/TT-BTC guiding transaction on the stock market taking effect from 1 July 2016 issued by Ministry of Finance replaces Cicular 74/2011/TT-BTC which guides transaction process. The new Circular is seen as a breakthrough compared with the former.
Regulation on securities related crimes under Criminal Law (admended) takes effect 1 July 2016. Besides 3 current crimes, a new crime added is: faking documents in offering, listing shares on the stock market.
Circular 107/2016/TT-BTC guiding offering and transaction of covered warrants takes effect 1/7/2016
Circular 11/2016/TT-BTC guiding Decree 42/ND – CP on derivative securities and derivative securities market.
BUSINESS OPERATION OF SECURITIES COMPANIES AND MARKET SHARE
4140
ANNUAL REPORT 2016
OVERVIEW OF 2017
The world’s economic growth in 2017 is forecast to reach 3.4%, higher than 2016 growth of 3.1% on the back of growth momentum of the US economy and other emerging econimies.
The US economy proits from public spending expansion and tax cut policies of the new administration, forecast to grow by 2.3% in 2017, far higher 1.6% growth rate in 2016.
Eurozone economy is forecast to grow slower in 2017 due to negative impact from Germany, Italia, Spain while the UK economy grows quite positively by 1.5%.
In Asia, China is expected to grow by 6.5% in 2017 versus 6.7% growth rate in 2016. Japanese economy is forecast to grow by 0.8% in 2017 thanks to expansionary monetary policy while India is expected to grow strongly by 7.2%
Nevertheless, the world economy in 2017 still faces a variety of challenges including: 1. Impact of Brexit; 2. The emergence of trade protectionism might pose barrier to global economic growth, especially in Europe when Germany and France have election, 3. Impact of new and to be issued policies under Donal J. Trump presidency.
Vietnam’s economy will maitain positive growth potential thanks to policies improving investment and business climate, recovery of oil price and agricultural produce, resilience of mechanical engineering industry and domestic consumption; most forecasts maintain that Vietnam is able to create 6.2-6.3% or even 6.7% growth rate in 2017.
Inlation may be higher than 2016 due to an increase in imported material prices and an adjustment of healthcare, education services, electricity price… As such, inlation rate in 2017 is expected to be around 4%-6%
FX rates in 2017 will be under pressure from Fed rate hike that leads to stronger USD. Besides, that China still maintain its weak CNY policy will force Vietnam to devaluate VND further to support competitiveness of export goods. However, with stable FDI and ODA in 2017 and expected trade surplus, highest FX reserves ever (USD 41 billion) will provide the SBV with more tools to better control FX rate regime so that it is unlikely for a sharp devaluation of VND but a slight adjustment around 2%-3% is more possible.
In the short term, the US’s withdrawal from TPP might not be a good news to FDI attraction and export activities of Vietnam. Nevertheless, Vietnam’s increasing integration into important free trade agreements such as FTAs with South Korea, the EU and ASEAN and luring investment environment are apparent advantages of Vietnam in drawing FDI, especially the inlux of Japanese and South Korean capital inlux moving out of China.
Credit growth is still favored with Government targeting a 18% growth rate in 2017. Recently BIDV, Vietinbank and Vietcombank are allowed to rasie lending/ deposit rate from 80% to 90% for the purpose. But interest rates are projected to rise due to higher inlation rate, stronger USD/VND rate and that commercial banks must comply with new regulations of SBV on short term capital for mi - long term lending, higher risk factor for real estate lending…
In 2017, the restructuring of the economy is still undeway with more positive business environment, expanding business activities. FDI capital is on the rise, seafood export will be more favorable while real estate - construction sector might decelerate and frozen somewhere, domestic production and services sectors will achieve average growth rate various challenges are likely to be faced by SMEs due to increasing competition.
0
6.47.6
1.22.1
10.9
1.31.7
2.33.3
Source: OECD source: compiled by SHS
OVERVIEW 2016 - 2017
THE WORLD VIET NAM
4342
ANNUAL REPORT 2016
Growth of Vietnam stock market in 2017 is forecast positive, however upside possibility may be a little bit lower than in 2016
NO KEY POLICIES AND INFORMATION INLUENCETIME
Stable politic environment, economic growth rate >6%, resilient FDI, ODA, strong credit growth rate
Implementation of 17% corporate income tax for SMEs
Recovery of oil and commodities prices
IPO and listing of big corporations such as Mobiphone, PVOil, Petrolimex, Vietjet Air
Merge of the two exchanges, deployment of new products, launch of derivatives market
Strong ownership divestiture by the State from SOEs
Continued room opening policy for foreign investors, upgrading stock market.
The US withdraws from TPP, mounting trade tariffs might pose negative impact on many export sectors
Fed’s plan to raise rate the third time affets foregin portfolio investment
China’s decelerating economic growth rate, devaluation of CNY vs USD
Winning possibility of rising nationlism in elections in France, Germany and tension between the US and the EU
Public debt approaching 65% celling, the return of high inlation, devaluation of VND, increasing interest rates
Negative consequences of climate change on agriculture and GDP growth
Pressure of new share listing might overwhelm short term money low.
Adjustment of policies concerning SOE valuation for equitization and divestiture
2017
Early 2017
2017
Early 2017
Late 2017
2017
2017
Month 3, 6, 9, 12/2017
2017
Q2& Q3/2017
2017
2017
2017
2017
Average
Weak
Strong
Strong
Average
Strong
Strong
Average
Strong
Strong
Average
Average
Average
Strong
Strong
ADVANTAGE
DISADVANTAGE
1
2
3
4
5
6
7
1
2
3
4
5
6
7
8
P/E of Vietnam stock market is around 15.9 times, far lower than the average of ASEAN (18.9 times). Generally, Vietnam stock market is still cheaper than the region’s norm, but the gap is no longer as big as it was. However, attractiveness of Vietnam stock market is added up by fast growth rate of Vietnamese companies. Vietnam is still the luring destination of foreign investors thanks to newly listed players and the State’s divestment story in 2017.
Draft of regulations on Covered Warrant products
Pilot testing of market maker mechansm on HNX in early 2017
Issuance of regulation on margin trading which replaces Decree 637/QD-UBCK dated 20/8/2011 and Decree 09/QD-UBCK dated 8/1/2013 by SSC Chairman
Proposed establishment of a stock exchange for SMEs and start up companies
Draft Member regulation on derivatives exchange and draft regulation for listing and transation of futures contract.
Draft Circular replacing Circular 226 and Circular 165: Adding warning mechanism for fund management and securities companies when available capital ratio is around 150%-180%
Amongst investment chanels, stock market is still poisted to be the most proitable option. According to our statistics, in 2016, investment return rate of common investment chanels were: bank deposit brought 6.5%; real estates increased by 6.4%; stock market increased by 14.8%; USD increased by 3.7%. In terms of proitability and liquidty, Vietnam stock market has its rationale to invest for either local or foreign investors in 2017.
ROA
ROe
p/b
p/e
source: SHS compiled
thailanD
vietnam
philippines
2.82.6
2.1
12.710.2
11.112.2
18.624.316.715.9
2.22.4
1.92
2.8
indonesia
OVERVIEW 2016 - 2017
STOCK MARKET 2017
IMPORTANT POLICES CONCERNING THE STOCK MARKET EXPECTED TO AMEND AND ISSUE IN 2017
PRINCIPALBUSINESS ACTIVITIES
46495659
Brokerage
Financial services and treasury
Financial advisory and Underwriting
Principal investment
4746
ANNUAL REPORT 2016
BROKERAGE
7.97%
7.94%
4.25%
5.80%
3.99%
7.83%
7.72%
3.65%
10.60
%5.9
8%
8.46%
5.66%
6.23%
5.72%
8.83%
4.93%
8.34%
5.00%
no. 3
Aver
age
Aver
age
Aver
age
Aver
age
no. 3
no. 6
no. 4
no. 8
no. 3
no. 4
no. 9
no. 1
no. 5
no. 2
no. 5
no. 3
no. 4
no. 4
Q1 Q1Q1Q1
Q2 Q2Q2Q2
Q3 Q3Q3Q3
no. 6
no. 3
no. 6 no. 5
5.33%
mark
et sh
are -
hsx
mark
et sh
are -
hNx
PRINCIPAL BUSINESS ACTIVITIES
Although the change in strategic orientation was timely and properly performed, weakness in brokerage service which did not successfully solve in 2016 was high operating costs due to high percentage of commission in total cost structure. Brokerage commission policy which was not properly changed in accordance with the competition conditions of current market was one of the biggest obstacles, making the Company fail to attract the talented, experienced and high qualiied brokers and the out-of-date and overload trading software was not replaced as scheduled. This was demonstrated by the relatively different market share igures in HNX and HSX and the slight increase in brokerage revenue of 0.38% against 2015 and only fulilled 85.23% compared to the target plan.
However, beyond the intrinsic diiculties and external challenges, SHS’s brokerage business performance in 2016 continued to be improved. Total securities trading accounts as of 31st December 2016 were 22,187 accounts, increased 3,767 accounts, up 20% compared to 2015. Number of active trading accounts in SHS continued increasing.
Moreover, taking advantage as the leading corporate inance advisory in Vietnam, SHS actively developed clients base in the SOEs to be equitized in 2016 such as P&T Express Service Joint Stock Company, LILAMA LAND CORP, No. 1 Auto Transport Joint Stock Company, Vinafor, VEAM, etc., via account opening services, depository account opening, shareholder book management services. The most pride for us in last year brokerage service was the average net asset value per client grew approximately 17% while VNIndex just increased 11.2%
% of active accountTotal accounts% OF Active accounts
22,187
18,420
16,138
4948
ANNUAL REPORT 2016
The average revenue per broker improved against 2015 as well, up by 1,45% against 2015. This criteria was high at SHS compared to other securities companies in top 10
OPERATION PLAN IN 2017:
PRINCIPAL BUSINESS ACTIVITIES
2017 is considered a favorable year for the stock market with investor’s trust in the Government’s effective macroeconomic policies and recovery of the world and the region economy; the market’s liquidity continues to be improved as demonstrated by powerful enterprises to be listed in HNX and HSX as well as the gradually improved quality of listing enterprises to attract cash low from domestic and foreign investors. Grasping the market’s opportunity, SHS’s brokerage will focus on:
Quickly change the trading software platform;
Changes in brokerage mechanism..
Develop brokerage operation sustainably, creating the best conditions for the investors through products and inancial services;
unit:
mill
ion v
nd
Financial services revenue in 2016 obtained VND203.6 billion, increasing VND8.2 billion, fulilling 4.2% of the plan and increasing 17.43% compared to 2015 level.
With the stability of brokerage, SHS had a remarkable improvement on revenue quality of inancial services, the inancial service revenue/brokerage revenue increased 176.04% in 2016 while the number in 2015 was 150.48%.
Besides the achievements, in the context of market luctuations and development, SHS’s inancial services products still had shortcomings that cannot be successfully handled in short time such as:
BUSINESS PERFORMANCE IN 2016
FINANCIAL SERVICESAND TREASURY
FINANCIAL SERVICES
External tools must be used (Open reports, excel, etc.) to follow up and manage products, resulting in time consuming in preparing management and monitoring reports.
Trading software system was not satisied demand of risk management for inancial services products, for instant, not unavailable margin lending based on tickers, or unable to administrate room of margin lending for client groups
Uncompetitive margin lending rate applied to clients due to high cost of capital funding
unit:
bill
ion v
nd
Revenue from margin lendingRevenue from stock investment advisory
BROKERAGE REVENUE
5150
ANNUAL REPORT 2016
Total disbursement amount in 2016 was VND1,714 billion, increasing 46.8% against 2015. The Company built lexible policy framework for each client group according to their demand from time to time, the eiciency of inancial resources was optimized. Thanks to that, SHS was able to attract more various groups of clients and capital funding was used eiciently.
The Company always ensured its competitions for margin lending portfolio, margin lending rate, margin lending scale, stability of capital funding as well. SHS also was active in inding the sources for capital funding to timely respond to client demand in accordance with the applicable regulations and laws. SHS was proud to be one of the securities companies that successfully used capital funding resources and offered a series of proper product and service solution packages regarding the transaction fee, interest rate, loan terms and customer-based risk appetite, successfully satisfying a wide range of client group.
In spite of the above-mentioned problems, the inancial service revenue/brokerage revenue ratio was continued to improve. This was because of SHS’ constant renovation in providing inancial services products and solutions to meet the client demand in 2016, hence bringing higher revenue for inancial services segment.
PRINCIPAL BUSINESS ACTIVITIES
Revenue from brokerage
Financial services revenue/ brokeragerevenue
Revenue from financial services
Bad debts from the 2016 inancial services were prevented by the Company’s application of policies on lexible and proper account maintenance and release by ensuring good risk management for each product, service and client group, while the serious NPLs were being suffered by many securities companies in the stock market.
Financial services department cooperated with related divisions to apply multi-layer risk management for each product and service. Particularly, working closely with legal department to evaluate product legality, anticipating possible risks; cooperating with the treasury department daily to actively provide funding resources to clients; working with brokerage division to introduce new products, support and educate clients how to best use products and services in accordance with their investment need; daily worked with internal control and risk management division to control process of providing product and service to the client to prevent and minimize possible risks. Therefore, the process of providing products and services was the most eicient in 2016.
A series of new application was successfully developed to manage operational risks for inancial services thanks to the support of software provider and IT department.
OPERATION PLAN IN 2017:
Balance the funding resources to offer a more competitive margin lending rate for clients.
Maintain the funding resources for products and services in a stable and long-term manner.
Upgrade trading software to successfully launch various products and services to meet the clients’ increasing demand.
unit: billion vnd
176.04 %150.48 %
115.22 115.66
5352
ANNUAL REPORT 2016
In 2016, the Company applied liquidity management program, ensuring capital liquidity for the entire company, successfully satisfying the capital demand to serve the Company’s business and providing inancial products and services to clients, and optimizing the funding resources via using various sources of funding for products and services of inancial services, and lexibly responding to the use of products and services in accordance with capital scale and capital structure in different moments.
The Company’s inancial safety ratio was to be always maintained at high level in accordance with the regulations of the State Securities Commission.
TREASURY
BUSINESS PERFROMANCE IN 2016
PRINCIPAL BUSINESS ACTIVITIES
Effective balance of funding resources
Diversifying the funding channels
Total average funding value in 2016 obtained VND2,309 billion, increasing 32% compared to 2015 and exceeding 6% compared to the plan.
SHS’s capital raising was diversiied from various sources: credit loan, bond issuance and otherwise, etc. In the 2016 capital raising structure, total credit loan value and bond issuance were accounted for a high weight (approximately 57%) and stable because this was a medium and long-term loans. In 2016, the average value of credit loans obtained VND500 billion, accounting for 22% of total funding resources, although it was affected by Circular No. 36, resulting in this funding resources were insigniicantly affected, SHS still successful maintained relationships with traditional partners such as SHB (with credit limit of VND500 billion), An Binh bank (with credit limit of VND100 billion), OCB (with credit limit of VND100 billion). Such credit institutions offered the preferential interest rate for SHS. The average capital raising from bond issuance was VND781 billion, accounting for 34%. However, this channel was generally characterized by higher costs than credit loans.
In 2016, the funding was mainly used for the investment activities and providing inancial services products. In which, the monthly average funding resources for investment was VND760 billion, equivalent to 40% of the Company’s inancial resources. The funding for inancial services was approximately VND1,142 billion/month, accounting for 60% of the Company’s inancial resources.
Proper using funding resources
unit: billion vnd
Credit borrowing
Margin lending
Bond issuance
Money Advance lending
Others
Principal investment
JANfeb
maraprmayjunjul
augssepoctnovdec
EXECUTED IN 2016
EXECUTED IN 2016
PLANNED IN 2016
EXECUTED IN 2015
1,028
5554
ANNUAL REPORT 2016
Treasury revenue was mainly originated from investments in valuable instruments such as bonds, notes, etc. Other incomes such as securities brokerage, securities issuance agent made up a small portion but that showed diversiication in treasury operation in accordance with legal regulations and lexibility from time to time.
However, the operating expenses in 2016 was VND248 billion, increasing VND99.9 billion compared to the last year and exceeding VND95.3 billion, equivalent to 62% compared to the plan. The root cause of increasing expenses was higher interest payable to banking partners due to changes in loan structure: more weight in high interest-bearing loans.
Therefore, though proit obtained over VND 25.1 billion, up by VND 15 billion than 2015 level, it was still VND15.1 billion lower than 2016 plan (down 37.6% compared to the target plan).
Impressive increase in revenue and profit compared to last year
PRINCIPAL BUSINESS ACTIVITIES
profittotal revenue
ACTION PLAN FOR 2017
Expand credit relationships with various commercial banks to ensure margin lending scale and proper interest rate.
Manage risks related to funding resources and prepare solutions for those risks.
Diversify capital raising channels, focusing on increasing owner’s equity.
Monitor and balance funding resources to ensure liquidity safety of the entire Company.
Work closely with brokerage, investment, inancial services, corporate inance advisory and securities underwriting to manage the use of funding resources.
unit: billion vnd
5756
ANNUAL REPORT 2016
CORPORATE FINANCIAL ADVISORY AND UNDERWRITING
BUSINESS PERFORMANCE IN 2016
In 2016, SHS continued to leverage traditional inancial advisory services which were its strengths such as equitization consultants, auction consultants, and divestments, and began to make SHS one of the best sell-side investment irms in Vietnam stock market through providing specialized advisory services such as mergers and acquisitions, underwriting, corporate restructuring
SHS went towards quality over quantity. In 2016 the number of advisory contracts signed in the year was 100 contracts, a reduction of 10% compared to 2015. Revenue reached VND14.6 billion, equivalent to lát year; the average revenue per contract increased by 25%. The remarkable factor in advisory revenue structure was that revenue from high intelletual advisory services such as corporate restructuring, equitization and State divestment increased sharply. Revenue from M&A, corporate restructuring increased more than 6 times. At the same time, M&A and corporate restructuring accounted for an important weight in total revenue structure of corporate inance advisory - underwriting
Particularly, we are honored to be the consultant of the year’s biggest equitization deal of the stock market: IPO of VEAM with successful auction percent up to 90%, obtaining approximately US$100 million. We are strongly believed that with the qualiied, large size and highly complicated deals consulted by SHS recently, its prestige and position in this ield have been signiicantly improved in the hearts of investors, especially institutional investors.
PRINCIPAL BUSINESS ACTIVITIES
Revenue Revenue per contract Number of executed contracts
VIETNAM POSTS AND TELECOMMUNICATIONS GROUP
GENERAL MOTORS CORPORATION AND AGRICULTURAL MACHINERY CORPORATION
VIETNAM FORESTRY CORPORATION (VINAFOR)
VINACOMIN – MINERAL HOLDING CORPORATION
In addition to main activities, corporate inance advisory during the year also actively supported other businesses of the Company such as brokerage, shareholder book management, Treasury, Financial Services. Speciically: After SHS did advisory contracts for listing and Upcom registeration for some companies such as Vietnam Forestry Corporation, Hanoi Rubber JSC, Song Chay 5 Hydropower Joint Stock Company, brokerage division had opened many securities trading accounts for clients (about 25% of total new accounts opened in 2016). Through customer base from inance advisory, Shareholder Management Division also provided shareholder management services to companies such as VINAFOR, VNI, VEAM, etc. For Treasury and Financial Services, through advisory activities of listing, auction and divestment of SOEs such as VEAM, Viet Ha Beer, Vietnam Forestry Corporation VINAFOR, Armephaco Joint Stock Company ... provided related inancial services.
Divestment
Divestment
Equitization
UpCom registration, Annual General Meeting, shareholders book management, divestment
14,814
14,581
OUTSTANDING ADVISORY CONTRACTS IN 2016
5958
ANNUAL REPORT 2016
Revenue target for 2017:
ACTION PLAN IN 2017
2017 will be a diicult year for traditional inancial advisory services because the process of equitization and divestment of SOEs are not expected to breakthrough. On that basis, SHS will focus on market-related products such as listing, transaction registration, IR consulting, etc. SHS will continue to research and seek opportunities to implement M&A deals through stock exchange
In addition, SHS will aim to promote interactions and expand relationships with clients, private enterprises with prestige and trademark in order to provide underwriting services and assist enterprises to implement IPO in accordance with international practices
PRINCIPAL BUSINESS ACTIVITIES
INVESTMENTS
BUSINESS PERFORMANCE IN 2016
Increase value in new investments
Reduced revenue and profit but more sustainable portfolio
2016 witnessed the Company’s successfulness in securities investments. SHS bought VND6,958 billion and sold VND6,816 billion. Total new investment value increased VND141.7 billion, increasing 23% compared to last year. Investment of listed securities only increased VND66.3 billion, equivalent to 12% while investment of unlisted securities increased VND75.5 billion, equivalent to 104%.
2016 was recorded with the Company’s investment revenue of VND165.6 billion, exceeding 23.9% against the plan. Investment activities continued to bring proit, however, cost of capital was high and provisions were made for the previous investments, thus proit only achieved 30.2% against the plan.
The recovery did not bring more opportunities for investors because it only happened to some stocks with large market capitalization. Although the stock market hit the record in 2016, compared with the nearest record in 2015, VN index just increased approximately 6.25% and this increase was mainly focused on stocks with large market capitalization such as VNM, VCB, BVH and stocks which were newly listed with large market capitalization such as ROS, SAB, etc. However, many stock groups were entered a fairly deep adjustment phase.
Unlisted securities
unit: Billion vnd
unit: Billion vnd
Listed securities
Fulfillment in 2016plan 2016
ListingIssuanceUnderwriting & underwriting agentEquitizationDivestment/auctionM&AOthers
unit: million vnd
1,380
5,172
2,360
1,956
4,017
TOTAL16,340 MILLION VND
67.09
99.76
165.6
85.56
14.1967.58
20.20
114.51
134.72
46.92
6160
ANNUAL REPORT 2016
Due to strict regulations on capital adequacy ratio as prescribed by the State Securities Commission, therefore the average capital for regular securities trading list was nearly VND500 billion compared with the initial plan of VND700 billion, resulting in the Company’s failure in taking advantage of disbursement opportunities in large scale to increase investment eiciency.
SHS’s portfolio was characterized by large proportion of SHB with approximately VND137 billion. The Company had to make provisions worth nearly VND30 billion in 2016 (mostly for SHB), resulting in increase in operating costs of investment activities. Otherwise, the proit of 2016 portfolio could have increased approximately 5% against 2015.
In 2016, SHS focused on restructuring the portfolio to become a compact, focused and eicient one. For the listed securities held by SHS, a drastic divestment had been applied for ineffective listed investments to focus resources for more proitable and effective investments. Portfolio restructuring resulted in increase in investment cost in short-term but it ensured the necessary resources, increasing the initiative for long-term investment strategy.
SHS also concentrated on acquiring unlisted securities which had effective core business, good competitive advantages, a series of growth potentials, attractive pricing and listed plan in the near future with expectation to generate big revenue in 2017 for the Company through auction or M&A. Investment value of listed securities reduced approximately VND150 billion and this amount were transferred to potential securities through auction, M&A such as Vietnam Pharmaceutical Corporation - Joint Stock Company (VINAPHARM), CIENCO 1, Binh Duong Water Supply Sewerage – Environment Co., Ltd (BIWASE), etc., these companies currently are very interested in by the market thus will bring great potential in 2017.
SHS effectively resolved non performing investments. As of 31st December 2016, SHS only had PID and PHC shares in its portfolio with investment value only accounted for a relatively small ratio in overall portfolio structure. With current market price, these investments incurred no loss, however, since PID had low liquidity, it was diicult to divest. The Company would closely follow up to divest when it is possible. For PHC shares, the Company could divest at any time but as PHC’s stock was on the rise, the Company continued to hold it.
Restructuring oriented to a compact, efficient investment portfolio through stronger weight on M&A, share bidding.
PRINCIPAL BUSINESS ACTIVITIES
In 2016, the Company continued to streamline investment team, internal transfer of inappropriate personnel as well as recruiting new personnel more suitable for investment activities. Generally, new members were qualiied with professional requirements, facilitating new investment plans, especially in investment activities through auction and M&A, hence helping the Company to successfully boost up new investments which could not be realized in the past.
SHS restructured for a streamline investment team.
6362
ANNUAL REPORT 2016PRINCIPAL BUSINESS ACTIVITIES
Portfolio management and investment opportunities
Human resources, training and internal management
ACTION PLAN IN 2017:
Continue strengthen investment activities through auction and M&A and gradually reduce weight on listed securities.
Concentrate on regularly and continuously internal training to improve knowledge for investment team.
Enhance quality of research report by improving staff quality to look for more feasible investment opportunities, and apply drastically proit-taking, cut loss principles to ensure portfolio’s safe operation.
For listed securities portfolio, new securities shall be invested for a long-term holding and higher holding percentage.
Invest in close relationships with enterprises; quickly collect information and data to actively handle the situation.
Completely screen the existing portfolio, divest non-potential securities in order to focus investment resources on a more eicient and larger investment scale.
Continue to recruit more qualiied personnel to improve the personnel structure of investment team in the direction of specialization and depth in analysis and trading activities through auction and M&A.
Strengthen risk management in investment by completely complying with principles, regulations and procedures developed by the Company and Supervisory Board, Internal Auditing, Supervising and Risk Management Divisions.
RISKMANAGEMENT
6667
73
73
Risk management
Identifying risks in business activities
Limitations on risk management in 2016
Risk manegemant plan for 2017
6766
ANNUAL REPORT 2016
RISK MANAGEMENT
SHS’ risk management system has launched since 2013 in accordance with Circular No. 210/2012/TT-BTC dated 30/11/2012 of the Ministry of Finance, Decision 105/QD-UBCK dated 26/02/2013 of the SSC and Decision No. 35-2014/QD-HDQT dated 01/06/2014 of the Board of Directors.
Accordingly, the risk management system of SHS is organized on three lines for many different types of signiicant risks on the basis that all the major risks in the business must have risk management procedures. The risk management process is closely connected to business processes and operational processes. The monitoring process for each type of risk consists of ive basic steps: risk identiication, risk measurement, risk monitoring, risk reporting and risk processing
In 2016, SHS strengthened its risk management activities, in which focused on identifying new risks, built effective information management systems that acted as a base for risk management, projected and updated risk prevention plans and, especially, built a proactive risk management culture at all levels of management. As a result, in 2016 SHS did not incur any critical risks associated with its business operation.
2016 is the year that SHS records a strong rise and breakthrough in the top
10 securities companies of Vietnam. The achievement is the result of a great
combination of lexible business strategy, and effective risk management.
RISK MANAGEMENT
IDENTIFYING RISKSIN BUSINESS ACTIVITIES
LEGAL RISK
Legal risk is the risk arising from the Company’s non-compliance with the applicable laws and regulations, or when disputes related to economic contracts that the Company has signed with clients, partners, employees ...
In 2016, the Company focused on legal risk management arising from new legal regulations on organization and operation of securities companies and from new products and services.
Solutions to prevent and minimize legal risks were:
Proactive legal risk management was applied by all levels of employees. Each department, especially manager level, such as department head, team leader, etc., raised their awareness to take initiative in updating existing legal documents, and identifying legal risks to communicate with legal department and propose to the Board of Management solutions to prevent and minimize legal risks for the Company and for the department
Information management systems for legal risks are developed in both vertical and horizontal dimensions. Legal risks are communicated not only from the management level to the departments and vice versa, but also from the legal department to other departments and vice versa.
Strengthened operation of the legal department in the direction of enhancing the quality of personnel. Each legal staff is an adviser to Board of Management and other departments. Compliance involved in all processes of launching of new products and services from start to end.
6968
ANNUAL REPORT 2016
SETTLEMENT RISK
Settlement risk is the risk arising to the Company caused by the borrower or partner improperly or inadequately fulilling their payment obligations according to the contract.
In 2016, the Company focused on management of settlement risk related to products of inancial services such as margin lending, cooperation with third parties (i.e., credit institutions) for clients to borrow money to invest in securities ...
Solutions to prevent and minimize settlement risks were:
Complied with regulations on client appraisal and loan referrals; on securities appraising as collateral for lending and loan referrals; on the addition of collateral and securities forced selling; and on debt collection period.
Board of Management regularly directed related departments to monitor critical settlement risk. As a result, proactive settlement risk management’s culture in all departments was increasingly enhanced.
Regularly projected, updated, and supplement plans to deal with arising settlement risks, especially for high risk clients group.
Built an effective information management system as a basis for managing settlement risk, in which focused on building and upgrading customer management software to become completely automatical. Brokerage and inancial services together with IT and partners provided software to build and upgrade the management software.
Classiied clients and partners based on different criteria to provide appropriate products and services and effective risk management solutions. Regularly, continually identiied emerging risks associated with each group of clients and partners.
RISK MANAGEMENT
LIQUIDITY RISK
MARKET RISK
Liquidity risk is the risk that happens when the Company could not perform its debt obligations or unable to convert assets into cash at fair value in short term period due to ill-liquidity market.
In 2016, the Company paid special attention to management of liquidity risk. Experience shows that clients are rising their demands on capital scale, loan stability and quality of products and services provided by securities companies. Hence, ensuring a large, stable source of margin inancing for clients is one of the key drivers for customer growth
Solutions to prevent and minimize liquidity risks were:
Market risk is the risk that changes the value of owned assets in an unfavorable way, negatively affecting revenue or capital of the Company due to changes in market factors.
In 2016, the Company focused on managing market risk that related to securities investments of the Company, underwriting with a irm commitment, margin lending to clients with securities on account as collateral ....
Solutions applied by the Company to prevent, limit market risks were:
Took initiative in margin lending sources by issuance of corporate bonds, or expanding the number of cooperated credit institutions and the scale of their lending…
Strengthened inance safety ratio and managed risks related to products and services in order to maintain SHS’ prestige to bondholders and lending partners.
Upgraded and improved the Company’s capital management software system as the basis for managing liquidity risk
Regularly set up projected plans for the Company’s liquidity risk.
Upgraded and improved management software system of the Company as the basis for managing the market risk of the Company
Performed underwriting with irm commitment only if there are plans already in place
Complied with regulations on securities appraisal as collateral for lending and margin lending limit
Complied with regulations on investment limits and stop losses in investment activities
7170
ANNUAL REPORT 2016
Bought and upgraded security software, worked closely together, regularly and continuously with partners to provide stable and secure trading software to clients.
Regularly reviewed and updated new operational risks, introduced risk prevention methods and solutions for operational risks
Regularly trained staffs to improve their professional skills
Assigned, and strengthened cross checking mechanism, mutual supervision between departments, individuals.
Trained staffs to improve their ability to identify operational risks and proactively propose solutions
OPERATIONAL RISK
Operational risk is the risk that happens due to technical errors, failures of system or business processes, human mistakes during operation or due to lack of working capital resulting from expenses, from investment activities or from other reasons.
In 2016, the Company focuses on managing operational risk related to trading software and operations of staffs.
Solutions were taken to prevent and minimize operational risks:
RISK MANAGEMENT
Effective internal and external communication through various channels. Communication was active, consistent, maintaining the frequency of appearing in the press/media
Took initiative in developing projected plans to manage branding risk
Appointed an authorized representative to do information disclosure fully, timely and transparently...
BRANDING RISK
Branding risks are the losses and damages of value due to changes in the customers’ perception of the Company, affecting the demand for products and services, as well as the general operations of the Company.
2016 is the year that SHS records a strong rise and breakthrough in the top 10, then top 5 securities companies of Vietnam stock market. In the face of bad rumors, SHS is required to further improve the Company’s brand risk management in order to help the Company develop sustainably and to strengthen the trust of its customers, partners and employees.
Solutions applied by the Company to prevent, limit branding risks were:
7372
ANNUAL REPORT 2016
LIMITATIONS ON RISK MANAGEMENT IN 2016
RISK MANAGEMENT PLAN FOR 2017
The stock market is considered a fast growing market. However, securities risk management is a new ield. Since SHS has implemented in the last 2-3 years, database and experience of securities risk management are not much. In the ive risk management steps, risk measurement, especially market risk, is always a major problem for risk management managers.
Although in the year 2016, the Company has proactively performed risk management, and staffs has identiied and recommended solutions for risk management, the risk management system is not really professional and needs more improvements.
In 2017, risk management system of SHS will continue to operate in accordance with the prevailing laws and the direction of Board of Director and Board of Management. The Company continues to develop, upgrade and strengthen internal risk management policies, and procedures in order to adapt to the development of the Company and the increasing complexity of securities sector. Besides, the Company will focus on recognizing, measuring and dealing with new risks in order to improve the Company’s business eiciency and ensure the Company’s sustainable development.
RISK MANAGEMENT
GOVERNANCEREPORT
7688
102
Report of Board of Management Report of Board of Directors
Report of Supervisory Board
7776
ANNUAL REPORT 2016
MEMBERS OF BOARD OF MANAGEMENT
VU DUC TIEN TRAN SY TIEN
Date of appointment: 01/11/2014Education level: Bachelor of accounting in banking Experience: 21 years of experience in inance, banking, administrative management, investingOwnership: 79,400 SHS shares (0.0079%) Present positions at other companies:
Date of appointment: 16/04/2014Education leve: Bachelor of EconomicsExperience: 21 years of experiences in the ields of banking and securities.Ownership: none (0%) Present positions at other companies:
MEMBER OF BOARD OF DIRECTORS / CEODEPUT Y CEO/CHIEF ACCOUNTANT
MrMr
+ Member of BOD of Saigon - Hanoi Insurance Jsc+ Member of BOD of Thanh Hoa Petroleum Construction Jsc + Head of Supervisory Board – Thanh Hoa Petroleum
Construction Joint Stock Company. + Member of BOD of Petroleum logistic services and Investment Jsc+ Member of BOD of Vung Tau Construction and Real Estate Jsc+ Member of BOD of Saigon - Hanoi Securities Jsc
+ Member of Supervisory Board - Petroleum Infrastructure Investments Joint Stock Company.
CHANGES IN BOARD OF MANAGEMENT in 2016
Appointment: No
Dismissal: No
NGUYEN CHI THANH TRAN PHUOC HA NHI
Date of appointment: 05/05/2014Education level: Master in Business Administration Experience: 13 years of experience in securities ield Ownership: None (0%)Present positions at other companies: None
Date of appointment: 09/08/2011Education: Master in Business AdministrationExperience: 10 years of experience in securities ieldOwnership: None (0%)Present positions at other companies: None
DEPUT Y CEO/DIRECTOR OF HO CHI MINH BR ANCH DIRECTOR OF DA NANG BR ANCH
Mr Mrs
REPORT OF BOARD OF MANAGEMENT
7978
ANNUAL REPORT 2016
REPORT OF BOARD OF MANAGEMENT
2016 witnessed the turning point of management strategy towards concentrating on successfully improving operating performance and risk management of Board of Management for a long-term stable growth. Such orientation’s appropriateness was proved by 2016 business performance.
SHS brokerage market share hit the record high and SHS was gradually acknowledged as a securities company with reliable position in Top 5 leading securities companies with large brokerage market share in both HNX and HSX and many solutions on transactions, products which outperformed competitors in the market. For corporate inance advisory, 2016 was recorded with SHS’s key concern on powerful clients with high added value including IPO deals, divestments, capital raising, M&A initiated by many giants such as VEAM, VNPT, Ministry of National Defense, VTC, Sudico, etc., and internal clients within the group. The investment activities were restructured by reducing the reliance on investment performance in listed securities and transforming to invest in securities from auction and M&A with a series of potential stocks having a promising breakthrough growth.
End of 2016, the Company was recorded with net revenue of VND 566 billion, pre-tax earnings of VND 86.6 billion, accounting for 108.3% and 68.7% against the set plan, respectively. In comparison with the 2015 performance, revenue increased 9.1% while the proit reduced 26.7%. For each operation, investment exceeded 23.9% of revenue plan with VND 166,8 billion, brokerage & inancial service fulilled 96.2% of the revenue plan; although operating revenue was still promissory, corporate inance advisory was recorded with VND 7,34 billion in 2016 as it was affected by some objective factors, equivalent to 40% of the annual plan.
In addition to positive factors, non-addressed diiculties made the business performance reduce against the expectation. Particularly, contracting mechanism was not applied for some sales divisions to launch KPI in the entire Company. Trading infrastructure system was not replaced as scheduled. Employees’ salary and income were not re-arranged as approved by Board of Directors to successfully attract the talents. Business strategy for some operations was unclear and inconsistent.
SHS’s operating expenses in 2016 was VND 439,2 billion, exceeding 40.5% against the plan. The above operating expenses were not originated from the 2015 businesses, other than SHS’s expectation on reimbursing provision for securities devaluation worth VND 19,7 billion from portfolio of the last years. A provision of VND 30,2 billion was required due to special disadvantages from some long-term held investments. Moreover, interest rate lightly increased and capital scale for brokerage and long-term investment activities increased resulting in an increase of 63% against the plan and the nature of the business was not properly relected.Concretely, administration expenses were continued to be closely managed by savings measures. The total was VND 40 billion, equivalent to 47.6% against the plan, fulilling 78% against that in 2015. It proved that expenses were well managed against 2015.
BUSINESS IMPLEMENTATION IN 2016Business performance in 2016
108.3%
85.3%
134.9%
87.1%
8.2%
97.1%
119.0%
68.1%
112.1%
108.3%
140.5%
90.8%
89.2%
90.4%
118.1%
-153.2%
144.1%
92.8%
60.2%
47.6%
109.3%
116.7%
565,950,51
115,652,86
181,706,12
50,896,19
535,00
50,361,19
9,286,57
725,91
207,682,87
565,950,51
439,286,27
23,322,58
33,234,21
90,00
4,325,16
7,604,63
30,234,25
283.518,17
56,957,25
126,664,24
40,117,59
22,963,71
814,96
522,804,90
135,553,40
134,722,88
58,415,15
6,550,00
51,865,15
7,801,40
1,066,24
185,245,83
522,804,90
312,572,53
25,694,87
37,264,29
-
4,782,08
6,439,10
(19,736,52)
196,754,88
61,373,82
210,232,38
84,206,25
21,004,55
698,14
Revenue (1=1.1+1.2+1.3+1.4+1.5+1.6)
Revenue of securities brokerage
Revenue of securities investment and capital contribution
Revenue of advisory service
Revenue of underwriting, securities issuance agent
Revenue of advisory service
Revenue of securities depository
Revenue of auction and trust
Others
Net revenue (2=1-1.7)
Operating cost (3=3.1+3.2+3.3+3.4+3.5+3.6+3.7+3.8)
Expenses of securities brokerage
Expenses of securities investment and capital contribution
Expenses of underwriting, securities issuance agent
Expenses of advisory service
Expenses of securities depository service
Expenses/ provision reimbursement
Others
Direct costs
Gross proit (4 = 2-3)
Business administration expenses
Manager costs
Materials, tool and instrument costs
1
1.1
1.2
1.3
a/
b/
1.4
1.5
1.6
2
3
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
4
5
5.1
5.2
No. PLANIN 2016
FULFILLMENTIN 2016
% AGAINSTTHE PLAN
ITEMS
UNIT: VND MILLION
REPORT OF BOARD OF MANAGEMENT
8180
ANNUAL REPORT 2016
In 2016 the Company bought VND 6,958 billion and sold VND 6,816 billion. Therefore, total investment value of SHS as of 31st December 2016 increased VND 141,7 billion, increasing 23% compared to the same period of 2015. The listed securities only increased VND 66,3 billion, equivalent to 12% while the unlisted securities increased VND 75,5 billion, equivalent to 104%.
12%
12%
-
-
-
104%
104%
-
-
-
23%
66,282,610,973
66,282,610,973
-
-
-
75,461,434,000
75,461,434,000
-
-
-
141,744,044,973
621,510,885,991
621,510,885,991
-
-
-
148,013,270,000
148,013,270,000
-
-
-
769,524,155,991
2,924,403,295,877
1,132,608,745,877
1,791,794,550,000
-
3,892,020,802,800
85,070,182,000
3,806,950,620,800
-
-
6,816,424,098,677
2,990,685,906,850
1,198,891,356,850
1,791,794,550,000
-
-
3,967,482,236,800
160,531,616,000
3,806,950,620,800
-
-
6,958,168,143,650
555,228,275,018
555,228,275,018
-
-
-
72,551,836,000
72,551,836,000
-
-
-
627,780,111,018
Listed securities
Stocks
Bonds
Funds
Others
Unlisted securities
Stocks
Bonds
Funds
Others
Total
I.
II.
NO. DECREASEINCREASEAS OF 01ST JANUARY 2016
AS OF 31ST DECEMBER 2016
CHANGE
AMOUNT %ITEMS
Investment activities
Costs of depreciating ixed assets
Taxes, duties and charges
Expenses/ provision reimbursement
Outsourcing service expenses
Other costs in cash
Net proit (6 = 4-5)
Others
Gross proit before tax
5.3
5.4
5.4
5.6
5.7
6
7
8
1,446,55
466,22
47,457,04
5,978,11
7,155,64
126,026,12
-
126,026,12
762,53
87,89
4,721,36
5,500,88
5,266,27
86,546,65
43,05
86,589,70
52.7%
18.9%
9.9%
92.0%
73.6%
68.7%
68.7%
REPORT OF BOARD OF MANAGEMENT
8382
ANNUAL REPORT 2016
2017 BUSINESS PLAN
OVERVIEW
1. General information for 2017
The world’s economic growth is forecast to increase in 2017, estimating 3.4% (IMF) thanks to the growth momentum of USA and some emerging and developing countries. However, the world economic in 2017 is still faced with a series of challenges including: 1/ BREXIT impacts; 2/Emerging of trade protectionism which may adversely affect on global economic growth, especially Europe; 3/ Impacts which are not completely estimated from policies to be promulgated by the President Donald Trump.
Generally, Vietnam economy is still actively evaluated in 2017. 2017 witnesses the challenges to Vietnam economy including: 1/ Changes in US policies and impacts on regions as well as global capital low transfer; 2/ High public debts (64.7% of GDP) while budget deicit have not been improved yet (estimated 4.3% of GDP against 4.28% in 2015), increasing inancial risks and directly affecting interest rate and expenditures for development investment; 3/ Continuous process of restructuring the economy in line with reform of growth model and focus on public investment, bad debt settlement
Growth in 2017 is evaluated to be maintained at active level thanks to policies on improving investment and business environment, recovery prospects of crude oil price and price of some agricultural products, capacity to maintain manufacturing industry and increase in domestic demand and drive from export growth, especially in FDI.
Inlation is expected to be higher in 2017 due to price pressure from increase in imported raw materials and price adjustment of some services such as health care, education and electric. Therefore, inlation is expected to vary within 4% - 6%.
Exchange rate in 2017 shall be subject to pressure from FED’s interest increase policy, USD appreciation, inlation increase. Moreover, the China’s poor policy on Yuan maintenance is also a factor which may affect the Vietnam exchange rate. However, with reservation of FDI and ODA sources like 2016 and the highest foreign currency reserves (USD40 billion), exchange rate is expected not to be sharply varied, but within 2%- 3%.
Interest rate and credit 2017 credit is expected to grow when business environment is improved and consumption is increased, speeding up investment demand. However, with increased inlation and trend of increasing USD interest rate in the world market, interest rate hit the loor and is forecast to increase in 2017.
Restructuring: The process of SOEs equitization and investment divesture, bad debt settlement of VAMC shall be continued. For banking, in addition to strengthening the credit quality control, the bad debt settlement process shall be pushed up.
-
-
-
-
-
OPPORTUNITIES:
CHALLENGES:
2. Forecast and impact analysis
2017 stock market is evaluated to be actively operated but still at prudent level and faced with potential challenges:
The world economy is forecast to obtain a higher growth rate than that in 2017. This shall signiicantly support the recovery of Vietnam economy, especially for exporting.
Challenges on US policies, instability in Europe shall continue risks for the global economy, including Vietnam.
In 2017, improved business environment, reduced input costs, and policies on reducing corporate income tax for the SMEs to 17% shall support business performance of companies. This shall be a good background for overall development of stock market.
The Government’s restricted budget balance and rising public debts are factors, affecting the inancial resources for development investment and growth momentum of the economy.
Many policies promulgated for the stock market shall be materialized and implemented in a more drastic manner, including Decree No. 60 which expands room for foreign investors, T+2 is initiated and regulation on registering transaction in the stock exchange is applied for SOEs after IPO, regulations on launching daily transactions. Moreover, new products such as warrant guarantee, derivative stock market shall be released. The above factors shall be the legal basis to actively support development of stock market.
Exchange rate may be adversely affected by depreciation of Yuan and an increase of USD interest rate, Vietnam interest rate is expected to hike in 2017. Those factors are adversely affected foreign indirect investment (FII) on stock market
Activities of enterprises shall be sharply segregated, requiring investment and investment advisory services of securities companies to be more lexible and sensitive.
The market growth rate is also affected by pressure from supply source. With SOEs restructuring, a large number of enterprises shall be continued to be subject to equitizaton; the divesture of non-core assets and guidelines on listing IPO companies shall make outstanding listing shares increase. Hence, market’s overall growth shall be signiicantly pressed.
Guidelines on equitization and listing many large-size enterprises, upgrading stock market from frontier market into emerging market, offering attractive price considering P/E and P/B against regional countries shall be the factors to continue attracting foreign investment low into the stock market in 2017.
Cashlow for securities investment is continued challenging due to impact of Circular No. 36 and Circular No. 07, restricting banking cash low for securities investment and business activities.
6.7%
6.2% 6.3%6.3%
6.3
Source: SHS Research
REPORT OF BOARD OF MANAGEMENT
8584
ANNUAL REPORT 2016
3. Impacts on SHS operations
OPPORTUNITIES:
CHALLENGES:
Although stock market in 2017 is evaluated to face with a series of challenges, opportunities are still available to SHS’s brokerage and investment activities.
Although the stock market is forecast to obtain positive signals in 2017, many potential challenges are still available, requiring the Company’s activities to be lexible to take opportunities.
Credit for securities investment and business activities are still affected by Circular No. 36 and Circular No. 07. Moreover, capital requirements for new products and for joining derivatives market require SHS to ind out new channels to supplement its funding sources for operationSecurities industry restructuring process together with new regulations shall affect operating costs, inancial safety ratio, thus impact on SHS’ lexibility in operation management.
Competition among securities companies in depth, high quality of services requires SHS to continue to invest in human resources and technologies to successfully maintain and improve its market share and images. This may make operating costs increase and put pressure on the Company in short-term.
Equitization, IPO of SOEs, divestiture of non-core assets, corporations, debt restructuring of banks, share issuance and listing are evaluated to continue to speed up, creating opportunities for SHS’s Investment, Brokerage, Advisory and Underwriting.
Improvement on the control criteria of securities companies will reduce the number of securities companies to ensure market development. Moreover, new operations such as derivatives are also characterized by stricter requirements on capital (brokerage operation requires charter capital, or owner’s equity of over VND800 billion, direct settlement & clearing requires capital of over VND900 billion). Therefore, it is also a great chance for SHS to reduce the number of competitors.
4. SHS business operation in 2017 shall prioritize in the following order:
Maintain and strengthen the position irmly in 2016. Enhance intensive and extensive brokerage development in terms of both quality and quantity. The important task is to improve quality of the brokerage, especially investment advisory. Moreover, the stability of the funding resources must be maintained to serve investor’s demand. The goal is ranked Top 5 securities companies with highest securities brokerage market share in both HNX and HSX and striving to be listed in Top 3.
Enhance qualiied human resources for operations, especially for IPO, M&A and corporate inancing restructuring advisory.
Risk control and management, inancial safety improvement must be still focused.
Strengthen the funding resources, good inancial safety ratios to satisfy the requirements of State Securities Commission and have suicient inancial resources for the operations.Continue to research and invest in IT to facilitate service quality improvement.
Improve inancial product and service quality, conduct research and development of new competitive products suitable with different client segments.
Take the opportunities available in market by investing into listed securities. Look for valuable investment opportunities by joining as strategic shareholders, auctioning the SOEs to be IPO in 2017. It aims to shift portfolio form listed securities to qualiied PE securities with high proitability.
PLAN AND SOLUTIONS FOR 2017 BUSINESS PLAN
The 2017 economic conditions and stock market are forecast to be favorable but challenging, the Company’s resources and strengths shall be developed to grasp opportunities and focus on stabilizing SHS’ inancial position, strengthening organization and human resources.
REPORT OF BOARD OF MANAGEMENT
8786
ANNUAL REPORT 2016
OBJECTIVESNO. DIVISION TASKS
Brokerage
Financial services
Investments
Advisory
Treasury
Management
1
2
3
4
5
6
Maintain the position in Top 5 leading securities companies; Strengthen customer development, especially institutional clients; Improve the quantity and quality of brokerage team; Enhance technology application; Improve investment advisory capacity.
Maintain product stability; Diversity service forms; Improve customer-oriented products towards lexibility and convenience but safety for the Company. Develop new products and services, products in combination with the third party not directly related to the securities.
Control risks, improve capital use eiciency; comply with legal regulations and the Charter
Offer proper capital balance to grasp opportunities on listed securities investment; Continue restructuring portfolio; Strengthen investment opportunities through M& A and Private Equity within the capacity of SHS; Launch other investment channels permitted by laws and the Charter
Launch conventional advisory services; focus on operations on corporate inancing restructuring; intermediary advisory with other IB activities; improve advisory quality.
Monitor treasury operation to ensure the Company’s liquidity safety; closely observe the market, forecast risks affecting the Company’s treasury, develop backup solutions; Look for solutions to successfully improve capital management; Launch solutions to supplement funding resources for the Company’s operations.
Train, screen, and recruit to supplement and improve HR quality; Screen and control costs, improve resources eiciency; add some middle and senior leaders
Develop SHS as one of the local leading brokerage companies; strive to be named in the Top 3 brokerage market share.
Develop lexible and convenient inancial products which are fully automated and integrated with trading software, conduct good operational risk management.
Make use of opportunities to look for short-term proit in combination with good proitable, sustainable and long-term portfolio.
Develop SHS to be the local leading advisor in Vietnam.
Ensure to satisfy the departments’ capital demand on the basis of optimal capital costs.
Apply dynamic, professional, discipline and high quality organizational structure in business activities.
2. Business Plan for 2017
Business plan is designed in accordance with some key assumptions as follows:
The world economy is stable;
Vietnam economy growth is stable without abnormal changes;
Average value in the stock market reaches VND3,300 billion/session (increasing 10% against 2016);
VN-Index is forecast to hit 750 scores +/- 10 scores.
Key business plan criteria in 2017:
Market share: Top 5 largest securities companies
Revenue: VND 625.9 billion
Total expenses: VND 503.1 billion
Proit before tax: VND 122.68 billion
Dividend: 8%
1. Key objectives and tasks
REPORT OF BOARD OF MANAGEMENT
8988
ANNUAL REPORT 2016REPORT OF BOARD OF DIRECTORS
DO QUANG HIEN
Date of appointment: 03/12/2007Member: Dependent and non-executiveEducation: Engineer of radiophysicsExperience: 23 years of experience in inance, banking, securities, management and investmentOwnership: 25,000 SHS shares (0.025%)Present position at other companies:
CHAIRMAN OF BOARD OF DIRECTORS
Mr
+ CEO of T&T Group JSC
+ BOD’s Chairman of T&T Group JSC., Saigon – Hanoi Joint Stock Commercial Bank, Saigon – Hanoi Fund Management JSC., Saigon – Hanoi Insurance Corporation JSC, SHB Industrial Zone and Urban Development Joint Stock Company, T&T Ha Giang Mineral Exploitation and Processing Joint Stock Company, Transport Hospital Joint Stock Company (TRAH., JSC)
MEMBER OF BOARD OF DIRECTORS
Changes in members of Board of Directors in 2016: Unchanged
LE DANG KHOA
Date of appointment: 11/4/2016Member: Dependent and non-executiveEducation: Bachelor of banking and inanceExperience: 8 years of experience in inance, banking, securities and investmentOwnership: 0 SHS share (0%)Present position at other companies:
NGUYEN MINH PHUONG
Date of appointment: 22/03/2013Member: Dependent and non-executiveEducation: Master of Business AdministrationExperience: 7 years of experience in inance, banking, securities, management and investmentOwnership: 0 SHS share (0%)Present position at other companies:
MEMBER OF BOARD OF DIRECTORS
Mrs
Mr
MEMBER OF BOARD OF DIRECTORS
+ Deputy Chairman of BOD – Saigon – Hanoi Insurance Corporation JSC + Deputy Director of Saigon – Hanoi Joint Stock Commercial Bank
MAI XUAN SON
Date of appointment: 24/01/2014Member: Dependent and non-executiveEducation: Bachelor in Business AdministrationExperience: 18 years of experience in inance, business administration and investmentOwnership: 44 SHS shares (0.002%)Present position at other companies:
MEMBER OF BOARD OF DIRECTORS
Mr
+ Board of Directors Chairman of Handicraft and Art Article Export – Import Corporation - Artexport Vietnam+ Deputy General Director of T&T Group JSC
+ Member of Supervisory Board of Vegetexco Vietnam JSC.+ Member of Supervisory Board of Transport Hospital Joint Stock Company
+ Director of T&T Motor Co., Ltd+ Chairman of Board of Directors of HACASEAFOODVU DUC TIEN
Date of appointment: 15/09/2014Member: Independent and executiveEducation level: Bachelor of accounting in banking Experience: 21 years of experience in inance, banking, securities, management and investmentOwnership: 79,400 SHS shares (0.0079%) Present positions at other companies:
MEMBER OF BOARD OF DIRECTORS / CEO
Mr
+ Member of Board of Directors - Saigon – Hanoi Insurance Corporation+ Head of Supervisory Board Thanh Hoa Petroleum Construction Joint Stock Company+ Member of Supervisory Board of Petroleum Infrastructure Investments Joint Stock Company
9190
ANNUAL REPORT 2016
REPORT OF THE BOARD OF DIRECTORS
ACTIVITIES OF SUBCOMMITTEES UNDER BOARD OF DIRECTORS
No. SUBCOMMITTEE RESPONSIBILITIESBOD MEMBER IN-CHARGE
1
2
3
4
GovernanceDevelopment policy
Human resources, salary, bonus and system administration
Risk management and internal audit
Finance and Accounting and Internal control
Mr. Do Quang Hien - Chairman of the Board of
Directors
Mr. Vu Duc Tien - Member of Board of Directors
Mr. Mai Xuan Son - Member of Board of Directors
Mr. Nguyen Thanh Quang - Member of Board of
Directors
Mr. Le Dang Khoa - Member of Board of Directors
Ms. Nguyen Minh Phuong - Member of Board of
Directors
Studied the macroeconomic condition and changes of policies and lawsGave out business development plans and solutions Convened 13 BOD meetings in 2016 to discuss and approve the decisions/resolutions for issues under authority Supervised compliance with laws and fulillment of business plans approved by the Annual General Meeting
Advised the Board of Directors in promulgating the internal regulations on human resources, salary and bonus.Studied and proposed HR, salary and bonus solution to Board of Directors.
Advised Board of Directors to promulgate risk management and internal audit policies and procedures.Directly supervised and managed operation and report of Risk Management Division and Internal Audit Division.Advised proper solutions to Board of Directors for Risk Management and Internal Audit-related issues.
Advised Board of Directors to promulgate Finance and Accounting and Internal Audit policies and procedures.Directly supervised and managed the operations and appraise the reports submitted by Finance and Accounting and Internal Control Division.Advised proper solutions to Board of Directors for Finance and Accounting and Internal Control-related issues.
The subcommittees were established and speciic duty was assigned to each BOD member as follows:
OPERATIONS OF BOARD OF DIRECTORS
In addition to subcommittees under the BOD, the supporting divisions are further established by the BOD, concretely:
RESPONSIBILITIES
NUMBER OF PARTICIPATORY MEETING/PROXY
TEAM
MEMBER OF BOARD OF DIRECTORS
TITLE DATE STARTING AS BOD MEMBER
1
2
BOD Oice
Internal Audit Division
Mr. Do Quang Hien
Mr. Le Dang Khoa
Mr. Mai Xuan Son
Mr. Vu Duc Tien
Ms. Nguyen Minh Phuong
Chairman
Member
Member
Member - CEO
Member
03/12/2007
22/03/2013
24/01/2014
10/09/2014
11/04/2016
13/13
13/13
13/13
13/13
9/13
Acted as secretary and consultant to the BOD.Complied with directions of the BOD Chairman in organizing the Annual General Meeting, Supervisory Board and the Chief Executive OicerManaged the Company’s shareholders and supported the shareholders to exercise shareholders’ rightPrepared and set up storage system of documents, regulations, procedures, reports, etc.
Conducted internal audit for the Company’s governance and business management activities.Proposed and suggested solutions for the shortcomings, risks and improved the business quality.
Operations of Board of Directors were complied with regulations of laws and the Charter
BOD member’s involvement of meetings as follows:
- In 2016, 2 resolutions and 30 decisions were promulgated by Board of Directors.
In 2016 BOD’s operations was focusing on orienting BOD operations, updating the Company’s performance, directing and orienting the Company’s performance to Board of Management, appraising and approving business proposals submitted by Board of Management, and monitoring the activities of Board of Management.
No.
Operations of Board of Directors
REPORT OF BOARD OF DIRECTORS
9392
ANNUAL REPORT 2016
Evaluating operations of BOD
BOD Meetings
In 2016, the Chairman of BOD directly directed Board of Management, regularly supervised all aspects of the Company, gave out guidelines and policies timely and properly in accordance with regulations of the laws and the Company’s Charter, which were suitable with socio-economic context and each development phase of the Company.
BOD members were adhered to each assigned operation and updated it in the documents, materials and reports prepared by the Board of Management, Internal Audit Division, Supervisory Board and notiied to all BOD Members for acknowledgment to take the measures to handle, oriented and supported Board of Management to ind out proper solutions, especially in the context of increasingly challenging market and a wide range of changes in concerned policies.
NO. MEETING DATE MEETING CONTENTS SESSION
Quarterly meeting in the 1st Quarter of
2016
Extraordinary meeting on corporate bond
issuance, irst phare 2016
Quarterly meeting in the 2nd Quarter of
2016
1
2
3
Evaluated SHS governance and operations of the Subcommittees and cooperation with Supervisory Board in 2015.
Prepared plan and orientation of BOD and its subcommittees in 2016.
Conducted duty assignment in 2016 for each BOD member.
Discussed completion of the 2015 income statement and the 2016 business plan to submit the Annual General Meeting for approval and tasks to be launched in the early of 2016.
Submitted the stock and bond investment plans and portfolio of other enterprises for Board of Directors to discuss and give out the directions.
Discussed and approved the SHS Bond Private Placement Plan for the irst phase in 2016, VND300 billion to support funding resources for margin lending securities. Bonds were used as the collaterals for loans at SHB.
Approved a series of reports such as 2015 Income Statement submitted by Board of Management, Operation Report of Supervisory Board and Appraisal of 2015 Financial Statements of Supervisory Board; Report on Remuneration Payment of BOD and Supervisory Board, remuneration payment plan in 2016;
Approved the 2016 Annual General Meeting held on 13pm dated 22nd April 2015 at the Trade Union Conference Center located at 7th loor, No. 1, Yet Kieu, Hanoi;
Uniied contents of documents to be submitted to the 2016 Annual General Meeting;
Approved the Resignation Letter submitted by Mr. Nguyen Thanh Quang - BOD Member on 11th April 2016 as prescribed in Point b, Clause 6, Article 39 of the Company’s Charter;
Approved the appointment of Ms. Nguyen Minh Phuong to undertake the title of BOD Member for 2012-2017 term since 11th April 2016 as prescribed in Clause 4, Article 46 of the Company’s Charter.
Considered the Company’s inancial position, inancial resources and credit for investment, brokerage and securities underwriting and approved some margin lending plans, etc., proposed by Board of Management.
Discussed and approved some stocks/bonds investment plans proposed by Board of Management.
Reviewed business performance of the irst 06 months of the year and launched 2016 business plan approved by the Annual General MeetingSummarized business performance as of 11th July 2016, particularly business investment activities and mobilize the inancial resources, review, discussed and approved some business plans proposed by Board of Management.
Considered the issues related to investment, treasury, and brokerage and risk management for the irst 7 months of 2016.Discussed and agreed some solutions on bond and stock portfolio structure by analyzing the economic situation and stock market in the Q2/2016; discussed and agreed on solutions to speed up brokerage operation and risk management; approved some Business Plans proposed by Board of Management.
Review business performance of the
irst 5 months of the year and launch the 2016 business plan approved by
the Annual General Meeting.
Extraordinary meeting on investment
performance for the irst 6 months of the
year.
Quarterly meeting in the 3rd Quarter of
2016
Extraordinary meeting on investment,
treasury, brokerage and risk management for the irst 7 months
of 2016
4
5
6
7
REPORT OF BOARD OF DIRECTORS
9594
ANNUAL REPORT 2016
Discussed stock and bond investment launched in the irst 8 months of the year; discussed and approved some bond and stock investment plans proposed by Board of Management.
Discussed and approved the SHS Bond Private Placement Plan for the second phase in 2016, VND 400 billion to support funding for margin lending securities. Bonds were used as the collaterals for loans at SHB.
Discussed and approved report on the Company operation submitted by Board of Management as of 20th September 2016, especially brokerage, investment, inancial services, inance advisory & underwriting, and risk management.
Approved some investment and business plans on Bonds, stocks, loans and capital raising proposed by Board of Management.
Discussed and evaluated bond investment opportunities in 2016.
Approved some bond investment and business plans proposed by the Board of Management.
Approved contents of Income Statements for the 9 irst months of 2016 submitted by CEO;
Approved solutions on launching the Business Plan for the last 3 months of 2016 submitted by CEO, with new proposals for outstanding issues and settlements;
Approved Operation Report for the irst 9 months of 2016 submitted by Supervisory Board and the proposals of Supervisory Board;
Approved the BOD contents to direct Board of Management to fulill 2016 Business Plan and approved some contents under the authority of BOD. The CEO was responsible for launching the approved contents and then reporting the BOD.
Reviewed 2016 business performance and considered the Company’s inancial summary;
Launched the composition of 2017 Business Plan to submit to Annual General Meeting for approval;
Approved some contents under the authority of BOD.
Preliminarily reviewed the 2016 Income Statement and 2017 Business Plan of the Board of Directors and the Board of Management.
Approved some contents under the authority of BOD.
Extraordinary meeting on investment
performance for the irst 8 months of 2016
Quarterly meeting in the 3rd Quarter of
2016
Extraordinary meeting on bond investment.
Quarterly meeting in the 4th Quarter of
2016
Review the business performance for the irst 11 months of
2016
Year End meeting 2016
8
9
10
11
12
13
OPERATIONS OF THE INDEPENDENT MEMBERS OF BOD
LIST OF BOD MEMBERS WITH CORPORATE GOVERNANCE CERTIFICATE
BOD’S ASSESSMENT ON THE COMPANY’S OPERATIONS
No independent members of BOD are available
BOD members have involved in the corporate governance training programs for leaders of banks, securities, etc.
2016 marked 20th anniversary of Vietnam Stock Market and a memorable year of Vietnam Stock Market. Closing the 2016 year-end trading session (30th December), VN-Index still maintained its green, reaching to 664 points, increasing 95 points compared to 2015 level, equivalent to 15% of growth rate in last year. HNX-Index was recorded with a slight increase of 0.2% to 80.12 points. Total market capitalization in 2016 hit over VND1.64 trillion (USD72 billion), increasing VND345,000 billion (26.6%), equivalent to an increase of over USD15 billion against that at the end of 2015. 2016 Vietnam Stock Market witnessed an unexpected external shocks, such as an artiicial interruption of China Stock Market on 4th January, Brexit on 24th June, US President Election Results on 9th November, bottom luctuations and recovery of crude oil rice, rubber price, gold price and some essential commodities of the world.
However, domestic impacts were much larger and characterized by a much more directly intensive inluence. Many investors and securities companies lost a lot of money due to reducing price of some shares such as TTF, DRH and MTM; the fever was created for both domestic and international investors by the “Giants” in the listing market such as Habeco, Sabeco, Novaland, Petrolimex, ACV, Quang Ngai Sugar when stock price were continuously increase; Timeframe from IPO to stock market was shortened to be 20 working days; VNX-Allshare - the irst index, connecting 2 stock exchanges was oicially launched; A series of divestment activities in 10 big companies held by SCIC was initiated; Framework and plans to develop derivative trading system and derivative clearing settlement were introduced; the Government Bond Market in 2016 was continuously acknowledged with many impressive records with the record capital raising of VND281,000 billion in the primary market; Total Government Bond volume hit the record of VND1.5 trillion and the session’s average value was over VND6,200 billion/session.
REPORT OF BOARD OF DIRECTORS
9796
ANNUAL REPORT 2016
For SHS, 2016 was also recorded with a sharp and breakthrough development of being one of 10 leading securities companies in Vietnam, especially the achievement on 1st ranked in HNX in terms of brokerage market share in Q4/2016 with 10.6% of market shares; named 3rd ranked in HNX with 7.94%; 5th ranked in HOSE in Q4/2016 with 5.98% of market share, 6th ranked in HOSE for year of 2016 with 4.25% of market share. In 2016, the Company obtained accumulated revenue and proit of VND569.95 billion and VND86.59 billion, respectively.
The Company was continued to be honored and offered with a series of noble titles, such as:
Core business of SHS. The securities brokerage operation was signiicantly developed by making use of available cash, high surplus of depository amount to satisfy investor’s capital demand; inancial services, inance advisory and securities brokerage services were diversiied and securities system and investor information management systems were continuously upgraded. The Company’s market shares in both stock exchanges were continuously improved. Brokerage revenue hit VND115.66 billion. No bad debts were recorded for the Company in 2016 in the context that many securities companies got stuck with some stocks such as TTF, DRH, and MTM…
2016 revenue obtained VND165.6 billion with a portfolio comprising of stocks which were sustainable; focused on assessing advantages and minimizing risks due to market inluence to create a proper portfolio; expanding the bond investment activities to diversify proit and exploit all advantages of funding resources.
Was recorded with total revenue of VND 50.9 billion in 2016; with a series of diversiied products, strong development of equitization and divesture, M&A of SMEs, capital raising and inancial structuring for enterprises and investors, securities investment advisory; trading and managing inancial resources safe and sustainably without insolvency risk.
The Certiicate of Merit was awarded by the People’s Committee of Hanoi City for its outstanding contributions to the Capital development.
For the second consecutive year, the Company was honored to be awarded with the title “Company with great contribution to HNX and Vietnam Stock Market development in the period of 2015 - 2016.”
Brokerage and Financial Services:
Investment activities:
Advisory and underwriting
The Company focused on community works, environmental protection and social security in daily working conditions as well as participating in typical community activities. The Company and its employees continued launching charity activities, granting cash and clothes, furniture and materials to support the diicult persons in hospitals, charity facilities and remote areas and developing the mutual support spirit right at the Company
Operations division was strictly adhered to regulations of laws and the Company’s Charter, enhancing risk management system, internal audit and control. The Company focused on completing internal procedure and regulation system, including the Company’s Charter, Governance Regulation, Investment Regulation, procedure system on launching business activities and controls in accordance with changes of Enterprises Law, Civil Code, Securities Law and the guidelines.The Company also developed new procedures on derivatives operations, built more competitive salary and training scheme to successfully attract high quality and experienced human resources.
The Company satisied all requirements of securities company ranking criteria set under CAMEL model of HNX with stable inancial position and sustainable growth, sound and transparent corporate governance, compliance with the regulations, great efforts in developing the securities trading in HNX as a member, modern IT system to be continuously upgraded to synchronize with IT system of the stock exchanges and Vietnam Securities Depository.
The criteria on Listed Share Brokerage Market Share, ailiation with HNX and compliance with member obligations to rank the securities companies in HNX were applied by SHS. The Company also was strictly adhered to the reporting and information disclosure obligations to avoid any violations.
The contents in the HNX ailiation criteria were fully and actively satisied: cooperating in ranking; cooperating in training enterprises, investors and participating into the programs held by HNX.
Operations division
Community activities
REPORT OF BOARD OF DIRECTORS
9998
ANNUAL REPORT 2016
BOD’S ASSESSMENT ON BOM OPERATIONS
BOD’S PLANS AND ORIENTATIONS
Great efforts of Board of Management (BOM) were recorded in managing and controlling activities of all departments, operations divisions; searching and developing the partners, clients; arranging funding resources, developing products and structuring portfolio to offer best eiciency for the Company and shareholders. BOM maintained the uniied and consolidated activities, assigned duties scientiically and effectively, members worked in the concurrent, lexible, decisive and professional manner in handling and inding out business solutions in the context of 2016 with a series of changes in macroeconomic policies.
BOM upheld the role of inspiring employees, promoted creativeness and activeness in operation, ceaselessly studied the knowledge, accumulated experiences and approached market, clients, mobilized a wide range of resources for SHS’s effective and smooth operation.
BOM members were awarded with Certiicate of Merits for their contribution to the Company’s development.
Moreover, in 2016, CEO Vu Duc Tien was awarded with Certiicate of Merits by the People’s Committee of Hanoi City for great contribution to the Capital development. Deputy General Director Nguyen Chi Thanh and Deputy General Director Tran Sy Tien were offered with the campaign medal by HANOISME for their great achievement in 2016.
Thanks to the above efforts of BOM, the Company continued working effectively and successfully maintained its position as one of the leading securities companies and powerful trademarks in the stock market, inancial market.
2017 is forecast to have good signs with the Government’s great effort and determination in renovating business environment, which further create new drives for enterprises and facilitate new momentum for growth. For securities sector, growth opportunities are available in 2017 and different from the context in the early of 2016. The market supply is forecast to be intensively and extensively improved in 2017. Investors expect listings of a series of giants such as Vietnam Airlines, Vinatex, Petrolimex; IPO of Vietjet Air, Mobifone and changes exchange of some enterprises with large market capitalization after trading on Upcom for some time such as Habeco, Viglacera and divesture in 10 enterprises of SCIC as approved by Government. Investors also have expectations from foreign inlow to Vietnam for its competitive advantages and new products since derivatives stock market is initiated. However, 2017 is forecast to hit the biggest risk originated from abnormal occurrence of the world’s political factors, including policies of the new US President, unanticipated impacts of Brexit, Yen delation risk which causes pressure on Vietnamese exchange rate.
In such context, SHS is determined to strengthen its position as one of the leading securities broker in Vietnam, named in the Top 3 of securities companies with highest market shares and the irst rank in HNX. The Company is recorded with sustainable, safe and effective development with powerful inancial position and diversiied and unique products.
Therefore, as the strategic management and orientation role, the BOM prioritized two tasks simultaneously which are designing and developing effective and sustainable development strategy together with risk control and management, maintaining the achievements and protection beneit of investors and shareholders.
The meeting and discussion about authorized and strategic issues for SHS development are regularly maintained by the BOD.
All BOD members must be actively involved in operations of BOD, subcommittees under the BOD to successfully grasp and keep up with market changes and the Company operations.
The BOD’s subcommittees are required to actively strengthen activities, update, advise and report the BOD existing conditions of activities launched by SHS to timely handle, as necessary.
The BOD commits to support, facilitate and advise the BOM in searching, approaching and exploiting the external resources, the partners, clients to successfully expand the business, customer base and product development.
The BOD continues directing the BOM to fulill the following tasks:
Outperform the strategic goals assigned by the General Shareholders’ Meeting; comply with the regulations of the laws, the Articles of Association and orientations of the State Securities Commission; Continue applying the measures on improving the governance and management in accordance with the international standards on corporate governance, risk management and inancial safety; ensuring SHS’s transparent, safe and effective operations in accordance with the legal regulations; Continue perfecting the professional regulations and procedures, creating the legal corridors for the businesses and operations in accordance with the legal regulations and improving the professionalism.
Focus on the spirit of Integrity - Solidarity - Responsibility - Discipline of each SHS employee to create the collective strength, striving for SHS’s sustainable development;
Facilitate the SHS’s sustainable development, focus on community works, environmental protection and social security, demonstrating the social and community responsibility.
REPORT OF BOARD OF DIRECTORS
101100
ANNUAL REPORT 2016
FULFILLMENT OF CORPORATE GOVERNANCE REGULATIONS
2016 was continued to be recorded with the Company’s compliance with corporate governance regulations in accordance with the applicable legal documents such as:
Related Laws such as Civil Code, Enterprises Law, Securities Law, etc.
Related legal regulations on corporate governance and organization, operation of Securities Company such as Circulars No. 121, No. 203, No. 155, No. 210, No. 07 on amending the Circular No. 210, etc.
Standards on preparing Financial Statements, regulations on preparing annual reports, sustainable development report.
Code of conducts of securities practitioners
Moreover, the best practices on corporate governance were also complied as guided by OECD to gradually become a potential, prestigious and professional inancial institution.
Unfulilled contents under legal regulations on corporate governance
NO. RESOLUTIONSPLAN ON IMPLEMENTING LEGAL REGULATIONS ON CORPORATE
GOVERNANCE IN 2015
FULFILLMENT IN 2016
CAUSES
Found out the independent Member of Board of Directors
Failed to apply the online voting in the event that the shareholders cannot directly participate and did not wish to authorize
Unpaid dividend to the shareholders
Failed to determine role of minor shareholders in approval, taking the viewpoints on transactions with interest conlict in the Charter
Approval limits and otherwise (investment limit, margin lending limit, etc.) were just designed in accordance with the applicable regulations of the laws.
Have not found appropriate candiate
This case rarely emerges high cost
Yet to erase accumulated loss after tax settlements
in 2015 and 2016
There was no change in Charter in 2016
Need more time to study, exercise, survey and build before the
issuance of detailed and internal limits
Find the proper person in 2017
Further survey the increase in such
shareholders to decide whether to launch or
not.
Perform in 2017 with percent of 8%/year.
Note to add into the Charter in case of amendment or the transactions with interest conlicts.
Promulgate upon successful
development
Unrealized
Unrealized
Unrealized
Unrealized
Unrealized
1
2
3
4
5
REPORT OF BOARD OF DIRECTORS
103102
ANNUAL REPORT 2016
MEMBERS OF SUPERVISORY BOARD
PHAM THI BICH HONG
VU DUC TRUNG
Date of appointment: 27/04/2015Member: Non-specializedExperience: Master in Finance and BankingExperience: 11 years of experience in inance and accountingOwnership: 48 SHS shares (0%)Present position at other companies: Member of Supervisory Board of Handcraft and Art Articles Export – Import Corporation
Changes in members of Supervisory Board in 2016: No
LUONG THI LUU
Date of appointment: 15/01/2008Member: SpecializedEducation: Bachelor in Finance and AccountingExperience: 30 years of experience in inance and accountingOwnership: 21,740 SHS shares (0.02%)Present position at other companies: None
Date of appointment: 06/04/2012Member: Non-specializedEducation: Master of Business Administration Experience: 14 years of experience in auditing and securitiesOwnership: 560,000 SHS shares (0.56%)Present position at other companies:
MEMBER OF SUPERVISORY BOARD
MEMBER OF SUPERVISORY BOARD
HE AD OF SUPERVISORY BOARD
Mrs
Mrs
Mr
+ Member of Board of Directors of Saigon – Hanoi Insurance Corporation JSC+ Deputy General Director of Saigon – Hanoi Insurance Corporation JSC
REPORT OF SUPERVISORY BOARD
OPERATIONS OF SUPERVISORY BOARD IN 2016
Meetings of Supervisory Board
NO. MEETING DATE SESSION MEETING CONTENTSNUMBER OF PARTICIPANTS
1
2
3
4
18/01/2016
09/05/2016
13/07/2016
12/10/2016
Periodically, 1st Quarter of 2016
Periodically, 2nd Quarter of 2016
Periodically, 3rd Quarter of 2016
Periodically, 4thQuarter of 2016
3/3
3/3
3/3
3/3
Conducted duty assignment to each member of Supervisory BoardUniied the general and speciic tasks in 2016 Inspected business performance of Q4/2015, summarized 2015 business performanceReviewed 2015 Financial Statements to submit 2016 Annual General MeetingPrepared report of Supervisory Board to submit 2016 Annual General Meeting
Conducted duty assignment to each member of Supervisory BoardEvaluated operation of Supervisory Board in Q1/2016 and launched operations in Q2/2016Selected Independent Auditor to review and audit the semi-annual and 2016 inancial statements, inancial safety ratio reports and proposed BOD for approval.
Evaluated operation of Supervisory Board in Q1/2016 and launched operations in Q3/2016Selected Independent Auditor to review and audit the inancial statements, semi-annual and 2015 inancial safety ratio reports and proposed BOD for approval. Participated summary meetings on business operations in the irst half year
Evaluated operations of Supervisory Board in the irst nine months of 2016 and launched operations Q4/2016 Inspected the Company’s business performance and inancial position in Q3/2016 and the irst nine months of the year by directly inspecting or through reports of internal audit and internal control.Considered fulillment of Resolution approved by Annual General Meeting, BOD’s Decisions in 2016; evaluated fulillment of the Company’s business plan.
REPORT OF SUPERVISORY BOARD
105104
ANNUAL REPORT 2016
Monitoring compliance with applicable laws, the Charter and Resolutions of Annual General Meeting
Monitoring operations of Board of Directors, Board of Management:
Compliance with the applicable laws and the Charter were regularly monitored in 2016 to ensure that regulations of the laws and the Charter were strictly adhered during performance. 2016 was recorded with no material violations to regulations of laws.
Obligation of information disclosure was also closely monitored for listing companies, securities companies, as well as major shareholders, internal shareholders and their related persons. 2016 was not recorded with any material violations for information disclosure obligations by the Company, major shareholders, internal shareholders and their related persons.
Fulillment of the Resolution No. 01-2016/NQ-DHDCD approved on 26th April 2016 by the Annual General Meeting was also monitored. Issues speciied in Resolution were fully fulilled by Board of Directors and Board of Management.
In 2016, Supervisory Board participated in the BOD’s periodic meetings and some meetings of Board of Management, inspected results of BOD member consultation on the Company’s important issues, involved in vote checking held by the 2016 Annual General Shareholders’ Meeting and released comments within its responsibility and authority. Meetings of Annual General Meeting, Board of Directors and Board of Management were complied with regulations of applicable laws and the Charter regarding meeting sequences and procedures, consultation and voting procedures and sequences as well as preparation and maintenance of meeting-related documents.
Monitoring the Company’s operations through internal audit:
The Company’s operations were monitored by directly involving or reviewing the reports submitted by internal audit divisions and internal control divisions. Periodic inspections were also carried out at Head Oice, focusing on inspecting and supervising some main points as follows:
Inspected and monitored compliance with the Resolution of the 2016 Annual General Meeting, business performance and inancial position, management and organization of the Company.
Reports demonstrated the accurate and objective igures, viewpoints and the constructive proposals to ensure Shareholders’ beneit and improved the Company’s operation performance, encouraged departments to provide accurate and transparent igures and ensured compliance with laws and the Charter, the internal inancial control system and good operational reporting regimes helped timely detect risks to take proper solutions.
Upon surveillance of the Company’s operation in 2016, Supervisory Board realized Board of Directors, Board of Management and employees have made great effort and successfully obtained some encouraging achievements compared to last year. Moreover, the Company successfully managed the risks and prevented the NPLs, complied with the regulations of the laws in business activities, inancial and accounting as well as news disclosures.
Supervisory Board directly inspected or through internal audit inspected or checked operational risk management and compliance with procedures and regulations in all departments.
Upon inspections, the objective conclusions were released and the shortcomings were proposed to solve. Inspection results facilitated operations divisions to review their procedures and proposed solutions to ix errors, if any, and supported Board of Management to manage and minimize operational risks.
REPORT OF SUPERVISORY BOARD
107106
ANNUAL REPORT 2016
Proposing to select the independent auditing firm and appraising the audited Financial
Statements
Resolving shareholders’ petitions against the Company
Board of Directors was proposed to select the independent auditing irm by seriously reviewing audit irms which are eligible to audit the listed companies and securities companies as notiied by the State Securities Commission.
Supervisory Board appraised and conirmed 2015 Financial Statements numbers and considered the Company’s Financial Statements audited by AASCN. Supervisory Board agreed on the numbers with AASCN, certiied the Financial Statements give the true and fair view in all material aspects regarding the Company’s inancial position as of 31st December 2015, the business performance, cash low statement and changes in owner’s equity for inancial year ended on 31st December 2015, the Report on Financial Safety Ratio as of 31st December 2015 to be complied with the applicable Vietnam Accounting Standards and Regime and the related legal regulations.
In 2016, the Supervisory Board recognized that the Board of Management, Board of Directors exececuted full functions and duties in compliance with the Corporate Law, the Company’s Charter and resolutions of the AGM, as follows
Performance of the Board of Directors
In 2016, the BOD held 13 meetings through collective discussions and requesting paper approval on important matters of Company including : verifying quarterly and semi annual business plans, verifying votes for addition and removal of BOD members, assigning tasks for BOD members, meeting to vote for new business strategies on brokerage, inancial services, inancial advisory and underwriting
BOD issued and veriied proposals by the BOM regarding business activities including : Decisions on investment and borrowing, bond issuances, decision to change BOD member, decision to set up Salary Commission and decisions to appoint high proile member within BOD’s coverage
The Chairman directly led the Board of Directors on matters regarding business and investment policies, introducing practial, timely decisions in speciic development of Company
Brokerage segment of the Company made some break-through, SHS is named one of the leading securities companies
2016 was not recorded with any petitions from shareholders or group of shareholders holding at least 5% of voting shares, requiring review of the Company’s operation, management of the Board of Directors and the Board of Management.
REPORT OF SUPERVISORY BOARD ON OPERATIONS OF BOD AND BOM
REPORT OF SUPERVISORY BOARD
109108
ANNUAL REPORT 2016
The BOM rentlessly renovates business activities, seriously implement resolutions by the AGM and BOD
The BOM organizes regular meeting with heads of departments, branches and requests approval from the Chairman and the BOD members to fulill assignments of the BOD
The BOM pays careful attention to improving personel quality, organizing internal training courses to develop employees’s competence.
Members of the BOM fulills tasks and assignment in compliance with the BOD’s guidance.
In 2016, Supervisory Board was fully informed with resolutions, decisions by BOD, the Director in accordance with business developments.
The Supervisory Board participated in BOD meetings and regular meetings of directors on setting business plans, implementing business plans, semmi-annual and annual meetings on business result of the Company
The Supervisory Board maintained effective co-ordination relationship with the BOD, BOM and employees of company to fulill its control and supervising tasks.
ASSESSMENT OF CO-ORDINATION BETWEEN SUPERVISORY BOARD, BOD AND BOM
All activities of the Company are executed in compliance with Vietnamese laws, information relase is timely and transparent. Board of Supervisory recognized no suspicion in management and directing activities at SHS by the BOM, BOD and managers of Company
Performance of the Board of Management:
REPORT OF SUPERVISORY BOARD
111110
ANNUAL REPORT 2016
In order to successfully fulill supervising tasks as prescribed by Enterprises Law and the Charter, 2017 action plan is released by Supervisory Board as following:
ACTION PLAN FOR 2017
Quarterly operation plan of Supervisory Board in 2017 is expected.
Speciic duties are assigned to members of Supervisory Board, concretely:
PHAM THI BICH HONG - HEAD OF SUPERVISORY BOARD: In charge of general issues Responsibility for inspecting and controlling departments: Investment, Treasury, Finance and Accounting, Internal Audit, Legal and Risk Management
LUONG THI LUU - MEMBER OF SUPERVISORY BOARD: Responsibility for inspecting and controlling departments: Brokerage Center, Financial Services
VU DUC TRUNG - MEMBER OF SUPERVISORY BOARD: Responsibility for inspecting and controlling departments: Advisory & underwriting, IT, PR & Marketing, HR and Admin, Debt
Settlement Committee
Maintain quarterly meetings to preliminarily review Supervisory Board’s works and give out activities orientation for next quarter.
Continue to inspect and supervise management and governance activities of Board of Directors and Board of Management, inspect the logicality, legality, compliance, honesty and diligence in managing and controlling the business, capital, materials and asset management, etc., of the Company.
Review the Company’s plans and reports on inancial position, business condition, development plans, organizational structure, labor, salary, bonus management and otherwise related to the Company and its employees;
Review inspection and control results of Internal Control and Internal Audit as well as the feedback of Board of Directors and Board of Management.
Quarterly inspect the Company’s accounting books, documents and otherwise, or conduct unexpected inspections as assigned by authorized person as prescribed in the Charter.
Appraise annual, semi-annual and quarterly inancial statements of the Company.
Work closely with Board of Management to understand the diiculties and obstacles in the operation to ind solutions.
Maintain close cooperation with Board of Directors, Board of Management and other departments in the Company.
Join training courses to improve professional qualiication, fully participate in conferences and control-related workshops.
Session I/2017: Session II/2017 Session III/2017 Session IV/2017
-
-
Review Financial
Statements for
Q4/2016
Appraise 2016
Financial Statements
Inspect business
performance in Q4/
2016 and FY2016
Prepare report of
Supervisory Board to
submit 2017 Annual
General Shareholders’
Meeting.
Review Financial
Statements Q2/2017;
Inspect business
performance in
Q2/2017;
Evaluate fulillment of the issues speciied in Resolutions of the 2017
General Shareholders’
Meeting and of Board
of Directors.
Review Financial
Statements for
Q1/2017;
Inspect business
performance in
Q1/2017;
Evaluate fulillment of the issues
speciied in Resolutions of
the 2017 General
Shareholders’
Meeting and of
Board of Directors.
Review Financial Statements
for Q3/2017;
Inspect business
performance in Q3/2017;
Evaluate fulillment of the issues speciied in Resolutions of the 2017
General Shareholders’
Meeting and of Board of
Directors.
Conduct theme-based
inspection:
Control and evaluate
fulillment of action plan and possibility to fulill the plan to report Board of Directors.
Control and analyze the
Company’s operating
expenses.
REPORT OF SUPERVISORY BOARD
SUSTAINABILITYREPORT
Report overview
Sustainable growth orientation
2016 sustainable growth report
2017 sustainable growth plan
Compliance announcement for GR4 based sustainable growth criteria
114117122137138
115114
ANNUAL REPORT 2016
The Sustainability Report is created to put together SHS’s announcements and operations in 2016 for the sustainable development of the Company. This is the second year SHS makes report in accordance with standard given in Sustainability report guideline of GRI, version G4. SHS picks principle “Consistent - Core” for the contents of the report in 2016.
The Sustainability report of SHS is an integral part of Annual Report and Financial Statement Report 2016. This report is yearly composed by collecting information and data from the Company’s business operation in inancial year 2016.
The report is composed by the Company’s Sustainability Reporting Group which comes from various departments to provide information and data in the most complete and transparent way.
Reporting period: from 01/01/2016 to 31/12/2016.
Target users are all employees of the Company as well as other stakeholders who are interested in SHS’s business operations such as partners, customers, suppliers, investors, shareholders and local community.
OVERVIEW
APPLIED STANDARD
SCOPE OF REPORT
SUSTAINABILITY REPORT
Sustainability Report is to summarize sustainability operations in 2016 and to highlight strategic direction of the Company in this activity in the coming years. The report will help the related stakeholders to have a complete, accurate, and comprehensive view of the Company’s business operations, corporate governance as well as its contributions to the society and community. Therefore, the report includes the following contents:
CONTENTS OF REPORT
01
02
03
04
05
The Company’s approach to sustainability comes from long-term economic growth objective combined with social development goal in order to contribute to community development.
SHS discusses with related stakeholders about sustainable development to identify their interests and expectations for the Company, and compare with SHS’s current strategic business direction, then modify to achieve an equilibrium between business interests and society, community interests.
DETERMINE THE REPORTING CONTENT
OVERVIEW
SUSTAINABLE DEVELOPMENT DIRECTION
SUSTAINABILITY REPORT OF 2016
SUSTAINABILITY PLAN OF 2017
DECLARATION ON COMPLIANCE WITH GRI4 CRITERIA
117116
ANNUAL REPORT 2016
To ensure the credibility of sustainable development information, SHS has developed an effective information management process.
Information management of sustainability is carried out by the Sustainable Development Group which includes members of Board of Directors, members of Board of Management, directors of relevant departments such as accounting, legal, PR & marketing…
Information is collected throughout the year and is classiied into groups such as economic eiciency, corporate governance quality, market impact, local communities impact.
Information is then discussed, evaluated and iltered by the Sustainable Development Group at the end of the year before making the sustainability report, and veriied by member of BOD and BOM before issuing. If there is any feedbacks, the Sustainable Development Group will review and response promptly.
INFORMATION MANAGEMENT OF SUSTAINABILITY
For further information and comments, please contact:
Contact: M.s Nguyen Thi Lan Anh Department: PR & Marketing
Telephone: 0438181888 Fax: 04.38181688 Email: [email protected]
CONTACT
SUSTAINABILITY REPORT
SHS insists on becoming a leading securities company that operates multi-functionally in accordance with investment banking model; maximizing shareholder value; creating a professional and lexible working environment as well as career opportunities for employees; contributing to the sustainable development of Vietnam stock market; and positive contributing to the community and social development.
In pursuit of the sustainable development goal, SHS has developed a sustainable development management model operating on a top-down basis. As follows:
The sustainable development model of SHS is to connect vision, mission and direction of the Company’s sustainability development. As a result, it places positive impacts on those involved inside and outside the Company.
STRATEGY FOR SUSTAINABLE DEVELOPMENT
MODEL FOR SUSTAINABLE DEVELOPMENT
SUSTAINABLE DEVELOPMENT DIRECTION
DUTIESMANAGEMENT LEVEL
COLLECTING EVALUATINGPROCESSINGPRESENTING FOLLOWING UP PROCESSINGFEEDBACK
Board of Directors
Board of Management
Divisions and Functions
Staff
Give strategic direction Approve objectives and plan of actions
Develop objectives, plan of actions for BOD Implement objectives, plan of actions approved by BOD
Implement plan of actions as instructed by BOM
Perform daily tasks related to the development objectives
--
--
-
-
IMPACT CONTENTS TARGET
Positive impact on the Company
Stable growthIncome and welfare guaranteeHuman resources developmentMotivation for developmentRegulatory compliance and risk managementBusiness transparency
Employees------
-
119118
ANNUAL REPORT 2016
Through the consultation with stakeholders via various communication channels, SHS identiies their interest with sustainable development
DETERMINE RELATED STAKEHOLDERS AND THEIR INTERESTS
INTERESTSCHANNELS FREQUENCYSTAKEHOLDER
Employees
Clients
Internal communication
Channels
Periodical events
Internal meetings
Other channels (emails, shared data drive...)
SHS locations (headquarters, branches, transaction oices, representative oices)
Website
Media (newspaper, e-news...)
Survey
Daily
Quarterly/Semi-annual/Annual
Periodical
Daily
Daily
Daily
Regular
Irregular
Good working environment
Stable job
Opportunities for promotion and development
ompetitive salary, bonus, beneits
Good training program and development policies
Quality of products and services
Apply IT in providing products and services
Scale and stability of margin inancing
Treat customers equally
Qualiication and professionalism of employees
Positive impact on securities market
Positive impact on environment, society and community
-
--
---
Maintain stable dividend payment and other beneits for shareholdersBe a trusted partner and share beneit Contribute to the development of green capital markets
Fulill tax obligations to the StateProtect environment Share with the community
-----
----
ClientsSuppliersShareholdersInvestorsGovernment bodies
Tax authoritiesYoung generationLocal communityThe disabled, homeless, orphaned, or sick
SUSTAINABILITY REPORT
Suppliers
Shareholders/
investors
Government bodies/
Regulators
The media / press
Local community
Other communication channels (in person, email, telephone....)
AGM
Conference, workshops, seminar
Face to face meetings at SHS
Media (newspaper, e-news...)
Others (website, email, telephone...)
Reports, information
disclosure
annoucements
Periodical check,
irregular check
Other channels (website, email, telephone...)
Conference
Interviews
Other channels (website, email, telephone...)
SHS locations
(headquarters,
branches, transaction oices, representative oices)
Website
Media (newspaper, e-news...)
Daily
Periodical
Regular
Requested
Regular
Daily
Periodical/Irregular/Requested
Periodical/Irregular
Daily
Regular
Periodical
Daily
Daily
Regular
Trustworthy in payment
Effectiveness of the Company’s business activities
Compete, transparent information
Dividends and other rights of shareholders
Stock price
Compliance with the law
Effectiveness of the Company’s business activities
Corporate governance and risk management
Contribution to the state budget
Contribute ideas for market development
Information about the operation of the Company
Share opinions and views on the market
Activities to improve the quality of community life
Charity activities
Activities to develop the young generation
Investment activities in sustainable development
121120
ANNUAL REPORT 2016
Through the consultation process, SHS also identiies important related parties, their interest level and impact level on SHS as follows.
Based on the assessment of interest level and the impact on SHS, the Company provides responses and actions to each group of stakeholders as follows
RESPONSE AND ACTIONS FROM SHS
STAKEHOLDER
STAKEHOLDER
INTEREST LEVEL TO SHS IMPACT ON SHS
IMPLEMENTED ACTIVITIES
High
High
High
High
High
High
High
High
Average
High
Average
High
Low
High
High
Low
Employees
Clients
Suppliers
Shareholders
Investors
Management authorities
The media / press
Local community
Employees
Clients
Guarantee a stable salary and welfare beneits policy
Create fair environment for all staffs advancement, and encourage employees to participate in internal and external training
Diversify products and services
Improve quality and competitive advantages
Ensure the scale and stability of the funding
Apply effectively IT when providing products and services
Improve process and procedures
Treat clients equally.
Improve the professionalism of front line employees
-
-
-
-
-
-
-
-
-
SUSTAINABILITY REPORT
SHS’s response and action are closely linked to the Company’s operation and the process of providing products and services.
PHASE ACTIONS OF SHS
Launching phase
Implementation phase
Termination phase
Assess overall impacts on related stakeholders.Assess solutions to the impacts on related stakeholders.
Evaluate the real impact on each stakeholder.Compare with initial assessment at launching stage.Report the impacts and propose solutions.Evaluate the possibility of further implementation.
Continue to evaluate impacts, if any, on what remains after terminating
--
----
-
-
----
-
-
-
--
-
-
-
-
Enhance liquidity risk management
Improve business eiciencyPay dividendEnsure their rights and beneits Disclose information fully, timely and transparently
Improve business eiciencyCorporate governance, risk management eiciencyDisclosure of information fully and transparently.Pay taxes and fees on time.Make suggestions for market development in a practical and feasible way
Save costs, recycled materials, assets, stationery, participate in local environmental protection activities Organize charity activitiesProvide opportunities for graduates to have internship or work part-timeDirect or indirect invest, connect capital to the Capital Market.
Suppliers
Shareholders/Investors
Management authorities
Local community and society
123122
ANNUAL REPORT 2016
2016 is the year to celebrate the Company’s 10th anniversary of. The Company has achieved remarkable results, after 9 years.
The company increased charter capital in the early years of establishment and since then has not raised capital for many years to ensure beneits for existing shareholders. After nine years of establishment, the Company’s chartered capital increased only 2.86 times (from VND350 billion to VND1,000 billion)
SUSTAINABLE GROWTH
The Company always pays great attention to business activities. Because of that, the revenue has grown dramatically over the years. In 2016, the Company’s revenue grew 9% compared to revenue in 2015 and 41% compared to revenue in 2014.
The Company is always concerned about sustainable development. The inancial safety ratio of SHS is constantly improving.
With the principle of understand your investments, based on inancial advisory and underwriting, as well as doing in-depth analysis of the investees, SHS carefully selects stocks that have sound investment, high proitability and long term prosperity. The Company sends experienced staff to participate in the BOD, the Inspection Committee to do business restructure, improve corporate governance, build a value chain and look for opportunities to effectively cooperate.
Thanks to the effective brokerage policies, the number of clients and the brokerage market share have improved gradually.The number of new accounts opening in 2016 increased by 20% while it increasing only 14% in 2015, the number of active transactions in 2016 increased 14% compared to only 5% in 2015
SHS’s brokerage market share has increased rapidly. It is considered a strange phenomenon when SHS got into top 10 securities companies in Vietnam in the past, however, nowadays the fact SHS is coming closer in the top 5 securities companies in Vietnam is a result of constant outstanding efforts in business and consistent business strategy.
In the face of ierce competition on the Vietnam stock market, while improving business eiciency, SHS always strives to maintain its prestige with clients and partners. As of 31/12/2016, the Company manages more than 22,000 trading accounts with VND 644 billion cash deposits and VND 13,000 billion value of securities in a transparent way
SUSTAINABILITY REPORT
SUSTAINABILITY REPORT 2016
7.97%
7.94%
4.25%
5.80%
3.99%
7.83%
7.72%
3.65%
10.60
%5.9
8%
8.46%
5.66%
6.23%
5.72%
8.83%
4.93%
8.34%
5.00%
no. 3
aver
age
aver
age
aver
age
aver
age
q4q4
q4q4
q3q3
q3q3
q2q2
q2q2
q1q1
q1q1
no. 3
no. 6
no. 4
no. 8
no. 3
no. 4
no. 9
no. 1
no. 5
no. 2
no. 5
no. 3
no. 4
no. 4
no. 6
no. 3
no. 6 no. 5
5.33%
mark
et sh
are -
hsx
mark
et sh
are -
hNx
New accountsActive accounts
519
125124
ANNUAL REPORT 2016
In brokerage and inancial services, the Company does not focus on increasing its market share at all costs, but on raising the quality of consultancy and quality of products and services to raise the assets value. Net asset value of clients has steadily increased over the years. In addition, enhancement of the quality of consultancy and risk management also helps clients to not “burn” their securities trading accounts and the Company did not incur bad debt in 2016.
The Company’s corporate governance system is based on the best practices of corporate governance according to the guidelines of the Organization for Economic Co-operation and Development (OECD) and the provisions of the Vietnam Laws on public companies management, securities companies management, aiming at long term development and balancing stakeholders interests and the Company’s interest. The Charter of SHS clearly deines the rights and obligations of shareholders, Board of Directors, Supervisory Board and Board of Management. In addition, the Charter also speciies the establishment and operations of internal control committee, internal audit, risk management committee to monitor the Company’s business operation.
Internal control system is the irst stage of enterprise compliance monitoring, which is at critical stage of each business processes and each department. However, these checkpoints are usually dependent of operational departments.
Therefore, the Internal Control Department is at Head Oice and responsible for overseeing compliance throughout the Company. Internal control is carried out daily to supervise the Company and securities practitioners’ compliance of the laws; implementation of internal regulations, procedures and regulations; potential conlicts of interest; implementation of employees’ responsibilities; performance of authorized persons; the Company’s inancial safety ratios; separation of accounts to ensure safety for clients’ cash and securities...
The Internal Control Department also performs regular inspections during the year. Through the process of supervisoring, internal control department advise for Board of Management and other departments deal with many business operations issues, corporate governance and supervisory.
Sustainable corporate governance
Internal Control
The Company has established an internal audit department under Board of Director since 2014. The internal audit department is the second stage of enterprise compliance monitoring to detect the risks and errors that the internal control department can not detected.
According to the regulations, internal audit department of the Company has the function of independent evaluation of the suitability and compliance with the State’s policies and laws, the Charter and resolutions of Annual General Meeting, Board of Directors; review and evaluate the adequacy, effectiveness and effectiveness of the internal control system under the BOD to improve better; evaluate compliance of business practices with internal policies and procedures; advise the BOD to establish internal policies and procedures; assess the control of property security measures; evaluate the effectiveness of business operations of the Company ...
The Internal Audit Department did periodical inspections throughout 2016 and informed, recommended, and advised to BOD and BOM a number of issues that could adversely affect the Company’s operations as well as provided solutions for those issues.
The Company has developed and operated a risk management system in accordance with the applicable laws including personnel, policies, regulations, procedures ... aiming at prevention, restriction and handling arising risks during the course of the business.
Risk management policy of the Company has been documented, in which deines the responsibilities of each level, identiies the types of signiicant risks, guides the process of managing each type of risk. All employees have the right to approach this policy and understand it.
Although SHS’ risk management system has only been established since 2014 and is still in the process of completion however, the risk management culture of all levels in the Company has been signiicantly improved. In 2016, SHS actively prevented risks, especially liquidation risk hence did not generate any bad debts.
For SHS, employees are valuable resources and motivations of its operation and development. Therefore, investments in human resources are highly focused. Besides attractive salary remuneration policy, the Company has always created a solitary and competitive working environment for employees to fully develop their creativity, to feel energetic and to contribute greatly to the Company’s operating results.
Internal Audit
Risk Management
Connecting for for sustainable goals
SUSTAINABILITY REPORT
127126
ANNUAL REPORT 2016
On 31/12/2016, the total number of employees was 195, decreased 5 staffs, equivalent to 2.5% compared to the number on 31/12/2015. The staffs of the Company are youthful, mostly under 40 years old (88%) and have university or higher degrees (94%).
Workforce statistics
under 30 above 50from 30 - 40 male femalefrom 40 - 50 University degree
Northern Front officeExecutives
Permanent contractAbove university degree
outhern Back officeManagers
Termed labor contractUnder University degree
Middle Management office
Other
The Company applies labor regime in accordance to Labor Law and provisions of Vietnam laws. Collective bargaining agreements are agreed by employees and registered with Labor, War Invalids and Social Affairs Department. All employees beneits from Collective bargaining agreements.
SHS ensures the best working conditions for employees. Head oice, branches and transaction oices are designed spacious and airy; fully equipped with personal desktops or laptops, and stationeries in order to create a sense of comfort, and convenience for employees. Human resource department is responsible for regularly remind staffs to maintain a professional working environment
SHS provides gender equality in working environment as well as fair development opportunities for female employees. The Management always encourages female employees to participate in manager positions of the Company. In addition, the Company also complies to provisions of Labor Law for female employees on working time, rest time during pregnancy, and maternity leave period…
The Company holds review activities twice a year to help managers and employees relect on what they have achieved. In addition, SHS annually organizes for managers and employees to go on vacation at least once a year for resting and having quality bonding time through team building activities. Sport activities such as soccer, yoga, etc… have been held regularly to help employees improve their health, thus working better. Welfare policy from the Company to employees includes all forms of support for employees to be ready physically and mentally at work.
Professional working environment
SUSTAINABILITY REPORT
129128
ANNUAL REPORT 2016
With good level of income and good working environment, together with many other good welfare policies, SHS has attracted a large, highly qualiied workforce.
Recruitment process of SHS has been built scientiically and lexibly. In addition to recruitment advertising on media press and the Company’s website, SHS gets its candidate pool from education & training centers, prestigious universities and professional head hunters providers. Therefore SHS has many opportunities to reach and attract highly qualiied, experienced staffs who are best it to its business development strategy. The Company absolutely do not use child labor and forced labor.
In 2016, SHS welcomes 53 new employees (increased 27%), in which 29 males and 44 females, 4 managers and 29 staffs to strengthen employee base as well as replace employees who resign, and mainly to meet the strategic plan of brokerage development of the Company. The hired employees are mostly experienced. They have worked in many other securities companies before. All applicants have to undergo a number of recruitment interviews. Selected candidates are those have experience and best it with the Company’s corporate culture.
Hiring experienced staff and fit with SHS’ corporate culture
In 2016, the Company appointed 4 staff including 1 manager and 3 employees and internal transferred 8 employees to the brokerage division to utilize capacity of staff member, hence improving the quality of products and services provided to customers.
Appointment and internal transfer to meet the business strategy of the Company
SUSTAINABILITY REPORT
Salary and bonus regime is set to be fair, transparent, and encouraging employees to have long-term commitment to the Company. It is established to be an incentive basis for employees to improve their work quality and responsibilities.
Employees’ income at SHS is the monthly net income since the Company has pay trade union fee, social insurance, health insurance, unemployment insurance, and personal income tax for employees.
Quarterly and annually, the Company organizes voting and rewards for outstanding staffs who have positive contributions to the Company’s operations. The reward system in both spirit and material creates a emulation movement among employees and departments. As a result, labor productivity and quality of products and services are increased.
In 2016, thanks to the lourish of brokerage operations, revenue for brokerage increased considerably, making employee bonus increased by 20%.
Salary and bonus
Social insurance, health
insurance, unemployment
insurance
Total expenses
Number of staffs at the end of
the year
Salary and bonus per capita /
month
48,949,280,497
1.884,284,160
50,833,564,657
200
20,395,533
17%
2%
17%
-2.5%
20%
57,431,055,511
1,922,307,630
59,353,363,141
195
24,543,186
Salary and remuneration policy
ITEM YEAR 2016 YEAR 2015 CHANGES
Internal regulations are available to all employees on the irst day working at SHS to help employees fully understand their rights and obligations.
SHS manages personnel on human resource management software with many utilities. Employees can access information about their salaries, bonuses, allowances, personal leave, and other information about the Company’s human resources. Human resources department can directly manage the Company’s personnel on software with different functions such as payroll, salaries and bonuses, timekeeping, leave, training ...
Professional HR Management
131130
ANNUAL REPORT 2016
In addition to salary and bonuses, employees at SHS are entitled to allowances based on the nature of their work, position, work performance and business performance of the Company (for examples: mobile allowance, fuel allowance, per diem allowance, birthday allowance, International Women’s day allowance, allowances to managers and employees who have participated in the military ...)
Health care for employees has always been taken care of with annual health check-up once a year with VND1 million/pax.
The Company provides work uniforms every 02 year to managers and employees, except for divisions and departments which work closely with partners and clients, new work uniforms are given every year.
SHS cares about not only its employees but also their relatives and families. Every year, the Company rewards employees’ children who have good academic performance; gives them presents on Children’s Day, Mid-Autumn Day; and supports employees who have family members being sick, or who have marriage, or funeral leave.
Details of allowances for employees and their relatives in 2016 as following:
SHS pays special attention to employee’s training. Besides encouraging employees to participate in professional training courses, SHS also trains its employees for advanced skills such as communication skill, interpersonal skill, customer service skill, presentation skill, analytical skills .... Internal training or cross training between divisions are encouraged to not only improve overall employees’ techniques but also create understanding and cooperation between divisions. The training is designed to make sure that the Company has backup employees waiting in the wings.
Allowances policy
Human resource training policy
Mobile allowance
Fuel allowance
Birthday allowance
International Women’s day allowance
Employees who have participated in the military
Children’s Day and Mid-Autumn Day allowance
Children with good academic performance
Employees with marriage, or funeral leave
VND 300,000 – Actual
VND 200,000 /pax/month
VND 300,000 /pax/month
VND 300,000 /pax/year
VND 300,000 /pax/year
VND 300,000 /pax/year
VND 300,000 – 500,000 /pax/year
Up to VND 1 million/pax
AMOUNTCONTENT
SUSTAINABILITY REPORT
SHS’ investor relations are paid special attention with the most fundamental principle: equal treatment to shareholders and among shareholders. Accordingly, all shareholders whether individuals or institutions, domestic or foreign, major shareholders or minor shareholders ... should be treated equally. All shareholders have rights to access information about the Annual General Meeting, attend the Annual General Meeting, , vote and question BOD and BOM at the Annual General Meeting. Remote shareholders can exercise their voting rights by authorizing others. Authorization can even be made online, making it best convenience for shareholders. Minor shareholders are entitled to protect themselves by forming a group to nominate and nominate members of Board of Directors and Inspection Committee as well as request Supervisory Board to review the Company’s operations, the management of BOD and BOM.
Information disclosure is concerned with goal of ensuring full, timely and transparent to ensure shareholders’ right of being fully informed about regular and irregular information about the activities of the Company. The Company appoints an authorized representative in charge of disclosure of information. Website provides inancial information as well as the Company’s recent activities fully, promptly and transparently. Any information that may affect to the Company’s operations, is disclosed publicly and transparently on media such as the Company’s website, facebook page, presses… to shareholders. . Shareholders also can access information about the Company via its publications that are available at seminars held by stock exchanges, or conferences for investors. Shareholders have right to be informed about shareholder structure periodically, to access information about insiders and related personnel at any time as well as information on the inal list of shareholders provided by VSD.
Sharing sustainable benefits
133132
ANNUAL REPORT 2016
In 2016, SHS continues to focus on upgrading trading systems and improving products and services to meet customer expectations.
Trading software is stable, supporting maximum to clients to make best decision.
Products and services of the Company are more diversiied and competitive in terms of capital scale, price, paperwork, meeting diversiied needs of different client groups.
The Company focuses on analysis, investment advisory and risk management, so net asset value of clients has increased rapidly. In addition, this signiicantly help clients prevent the case of “burning” accounts due to overtrading or due to unable to forced selling because of severe decline.
Clients
In order to meet the increasing capital of clients, the Company has cooperated with commercial banks so that SHS customers can borrow capital for their investments in listed securities. SHS always provide its banking partners with a list of trustworthy clients. Moreover, SHS manages clients’ collateral for banks through Collateral Management Contract signed by three parties. Tight policy of collateral management enhances capital disbursement in securities sectors as well as improves SHS’ prestige.
Other suppliers providing tools, or stationeries ..., SHS always makes payments promptly to maintain long-term cooperation.
Suppliers
SUSTAINABILITY REPORT
In 2016, SHS continues to improve the organization structure toward employing recourses eiciently in order to strengthen its competitive advantages. In all of its business activities, SHS allocates part of its capital and human resources to invest and support the green capital markets.
SHS has been a member of the government bond trading since 2010. In 2016, the company invested about VND1,800 billion in government bonds and 3.2 times more than the investment in 2015, VND900 billion in bonds of Vietnam Bank Social Policy and Agriculture Bank, equaling half of the investment in 2015, in order to indirectly fund the Government’s targets, programs and green projects.
The Company also allocated a speciic percentage of its investment in green stocks (listed companies with fundamentals, which invest in green ields, produce eco-friendly products or technology solutions such as AAA, SHI, VNM, FPT, REE, DQC, GTN ...
The Company has provided a wide range of corporate inancial advisory and underwriting services to green enterprises with total collected fees in 2016 of VND3 billion.
Responsibility to green capital market
Investment Brokerage, inancial services and investment advisory
TOGETHER FOR COMMUNITY AND SOCIETY SUSTAINABLE DEVELOPMENT
135134
ANNUAL REPORT 2016
1
2
3
4 ...
5 ... ...
6 ...
7 ....
8
.
9
10
11
12
13
14
15
Licogi 14 Joint Stock Company
Licogi 16 Joint Stock Company
Bac Giang Clean Water Joint Stock Company
The Southern Fertilizer Joint Stock Company
Duc Long Gia Lai Group JSC
Environment Construction Joint Stock Company - TKV
Sonha International JSC
Inland Waterway Maintenance and Management No. 10 Joint Stock Company
Song Da 5 Joint Stock Company
Song Chay 5 Hydropower Joint Stock Company
Habac Nitrogenous Fertilizer & Chemicals Company Limited
Haprosimex JSC
EVNNPC
Vietnam Forest Corporation
Vietnam Maritime University
Construction of hydropower projects
Construction biofuel plant in Binh Phuoc
Projects to improve the capacity of water supply system in Bac Giang
Productions of organic fertilizers, specialized fertilizers ... to increase productivity for farmers
Applications of technology to breed organic cows to achieve Global GAP standards, reaching towards the standards of organic products
Provide intelligent renewable energy solutions for Con Dao
Drainage and waste water treatments, pollution treatments and waste managements ...
Production of environmentally friendly solar water heaters, nonlammable and electricity saving
Dredging of rivers, canals, leveling and treatment of waterways
Construction of hydropower projects which will increase the amount of electricity and minimize the environmental impact of thermal power plants
Production of electricity from nature
Habac Urea product is used as fertilizer in agriculture, helping farmers to have better yields
Grain products such as black pepper, white pepper, chestnut are natural and environmentally friendly. Large export amounts bring high beneits to enterprises and country
Implementation of energy saving policies such as organizing the campaign “Family Power Saving”, “ Schools Power Saving “ ... to disseminate and motivate users to have responsibility to save electric power
Participation in research and development of forest seed. In addition, plantation of economic forests to supply raw materials, intensive plantation, large timber plantation ...
There are research centers for technology, electrical engineering, electronics and automation. In addition, training and consulting science and technology of marine environmental protection
No. ACTIVITIESCOMPANY
SUSTAINABILITY REPORT
Green enterprises often have good business and sustainable development, so many investors choose to invest in such as PAN, FPT, REE, DQC, GTN, SHI ... Therefore, SHS, as advisors and stockbrokers for the capital market green, provides a wide range services of brokerage, investment advisory and inancial services to clients who invest in these stocks.
Contribute to the State budget
SHS diligently fulills tax and fee obligations to the State budget such as CIT, VAT, PIT, environmental fee, registration fee ...
Speciic tax and fee obligations in 2016 as follows:
Besides actively implementing cost management (such as stationery, energy, water ...) to reduce harm to the environment, SHS improves trading platform to increase online trading thus reducing signiicantly printing cost. In addition, due to the regular review of forms, agreements, contracts, the cost of printing forms, agreements, contracts has also decreased signiicantly. SHS involves in the portal system of the General Department of Taxation, State Securities Commission of Vietnam, Hanoi Stock Exchange, Vietnam Securities Depository and Insurance Vietnam, thence reporting, information disclosure and securities custody are almost non-material. This is not only to simplify procedures but also to reduce waste paper and printing ink to minimize harm to the environment…
The Company has also taken many measures to ensure a clean and professional working environment to protect employees’ health as well as surrounding environment. These measures include issuance of internal regulations for environmental protection, implementation of monitoring mechanisms, regime of reward and discipline, and forming employees’ habit of protecting the environment at all times.
In 2016, the Company did not violate any legal provisions of law on environmental protection
CIT
VAT
PIT
Other taxes and charges
Not paid due to the loss carry forward
VND 658 million
VND 44,6 billion
VND 278,5 million
However, SHS had temporarily paid in advance VND 12 billion in 2011.
Corporate finance advisory and underwriting
Prioritize environmental protection
PAYABLE AT 31/12/2016AMOUNTTYPE
137136
ANNUAL REPORT 2016
SHS creates opportunities to experience hands-on work in the securities sector for about 15 students who are still studying or have just graduated from university in most of departments for 1-3 months. Especially, 6 months in some cases. Students have opportunities to work as oicers, employees of the Company, trained and immersed in the cultural activities of the Company. Students also get paid a stipend of VND 1-3 million per month to. Students who do well will have job offers after internship.
SHS demonstrates its responsibility to local communities and society through sponsorship activities. In 2016, SHS contributed VND 2.18 billion, nearly 10 times higher than the igure of 2015 (only VND 223 million).
SHS’s 2016 contribution to local community as follows:
The Company also represents responsibility to local community by contributing to funds for the poor, funds for education promotion... which are launched by ward, district, city committee. During the year, employees of the Company have held many charity activities, donating money and clothes, material utensils to support poor children in hospitals in Hanoi. The Company always encourages employees to share with the less fortunate and considers that as part of its cultural.
1
2
3
4
5
Sponsor Football League HASMEA
Sponsor Saigon Football Club
Sponsor free meals to patients at the Central Children Hospital
Organize the propaganda program on dissemination of new decrees, circulars on equitisation and listing at SOEs
Sponsor celebrating 20 years of Association of Small and Medium
Total
Hanoi Association of Small and Medium Enterprises
Saigon Football Club
Hanoi Association of Small and Medium Enterprises
Ministry of Finance
Hanoi Association of Small and Medium Enterprises
50,000,000
30,000,000
2,000,000,000
50,000,000
50,000,000
2,180,000,000
Create opportunities for hands-on experiences for the young generation
Responsibility for the local community and society
No. ITEM LAUNCHED BY AMOUNT (VND)
SUSTAINABILITY REPORT
While evaluating sustainable development performance in 2015 and comparing it with the objectives and action directions, SHS set out an action plan for 2017 as follows:
Improve operation eiciency; corporate governance, risk management, anti-money laundry; report and disclose information fully, clearly and timely to raise SHS’ prestige; increase the salary and welfare for employees to competitive level with top securities companies on the market; ensure dividend payment of at least 10% to shareholders; meet the requirements and expectations of stakeholders for SHS’ stock price; contribute more taxes and fees to the State budget.
Actively support development of youth programs by creating more internship opportunities for students and organizing career talks in universities which have securities faculties.
Promote and expand programs, or activities contributing to development of the community.
Develop and provide a wide range of products and services for clients on Green Capital Markets.
ACTION PLAN FOR 2017
139138
ANNUAL REPORT 2016
G 4 - 1
G4-2
G4-3
G4-4
G4-5
G 4 - 6
G4-7
G4-8
G4-9
G4-10
G4-11
G4-12
G4-13
G4-14
Declaration of the leaders of the Enterprise
Describe key impacts, risks and opportunities
Name of the organization
Products & Services
Organization’s headquarters
The number of countries where the organization operates
Type of ownership and legal form
Markets served
Organization scale
Organization’s work force statistics
Percentage of total employees covered by collective bargaining agreements
Organization’s supply chain
Signiicant changes during the reporting period regarding the
organization’s size, structure, ownership, or its supply chain
Report whether the precautionary approach or principle is addressed by the organization
ANNUAL REPORT- Chairman’s Message
SUSTAINABILITY REPORT-Business performance
ANNUAL REPORT- Risk Management
ANNUAL REPORT-Company overview
ANNUAL REPORT-Company overview
ANNUAL REPORT-Company overview
ANNUAL REPORT-Company overview
ANNUAL REPORT-Company overview
ANNUAL REPORT-Company overview
ANNUAL REPORT-Company overview
SUSTAINABILITY REPORT 2016
SUSTAINABILITY REPORT 2016
ANNUAL REPORT-Company overview
ANNUAL REPORT-Company overview
ANNUAL REPORT- Risk Management
SUSTAINABILITY REPORT 2016
SHS is now operating in Hochiminh City, Hanoi, Danang- Vietnam
100%
Unchanged
STRATEGY & ANALYSIS
COMPANY PROFILE
DECLARATION ON COMPLIANCE
WITH GRI4 CRITERIA
GRI DESCRIPTION REFERENCE NOTE
SUSTAINABILITY REPORT
G4-17
G4-18
G4-19
G4-20
G4-21
G4-22
G4-23
G4-24
G4-25
G4-26
G4-27
List all entities included in the organization’s consolidatedinancial statements or equivalent documents
List all entities included in the organization’s consolidatedinancial statements or equivalent documentsList all the material aspects identiied in the process fordeining report contentFor each material aspect, report the Aspect Boundary withinthe organizationFor each material aspect, report the Aspect Boundaryoutside the organizationReport the effect of any restatements of informationprovided in previous reports, and the reasons for such restatementsSigniicant changes from previous reporting periods
A list of stakeholder groups engaged by the organization
The basis for identiication and selection of stakeholders with whom to engage
The organization’s approach to stakeholder engagement
Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns
ANNUAL REPORT-Audited inancial statements SUSTAINABILITY REPORT – Overview
SUSTAINABILITY REPORT – Overview
SUSTAINABILITY REPORT - Sustainable Development Direction
SUSTAINABILITY REPORT - Sustainable Development Direction
SUSTAINABILITY REPORT - Sustainable Development Direction
SUSTAINABILITY REPORT – Overview
SUSTAINABILITY REPORT – Overview
SUSTAINABILITY REPORT - Sustainable Development Direction
SUSTAINABILITY REPORT - Sustainable Development Direction
SUSTAINABILITY REPORT - Sustainable Development Direction
SUSTAINABILITY REPORT - Sustainable Development Direction
IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES
STAKEHOLDER ENGAGEMENT
G4-15
G4-16
List externally developed economic, environmental and social charters, principles, or other initiatives which the organization endorsed
Memberships of associations
SUSTAINABILITY REPORT – Overview
SUSTAINABILITY REPORT 2016 Vietnam BondMarket Association(“VBMA”)
There are norestatements
None
141140
ANNUAL REPORT 2016
G4-56
G4-EC1
G4-EN2
G4-EN6
G4-EN27
G4-EN 29
G4-28
G4-29
G4-30
G4-31
G4-32
G4-33
G4-34
The reporting option the organization has chosen
The contact point for questions regarding the report or its contents
Governance structure of the organization, including committees of the highest governance body
Values, principles, standards and norms of organizational behavior
Direct economic value generated and distributed
Recycled input materials
Energy consumption within the organization
Extent of impact mitigation of environmental impacts of products and services
Monetary value of signiicant ines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations
SUSTAINABILITY REPORT - Sustainability Report 2016
SUSTAINABILITY REPORT - Sustainability Report 2016
SUSTAINABILITY REPORT - Sustainability Report 2016
SUSTAINABILITY REPORT - Sustainability Report 2016
Recycle of one sided print paper
SUSTAINABILITY REPORT – Sustainability Report 2016
ANNUAL REPORT-Company overview SUSTAINABILITY REPORT 2016
SUSTAINABILITY REPORT – Overview
SUSTAINABILITY REPORT – Overview
SUSTAINABILITY REPORT - Sustainable Development Direction
REPORT PROFILE
GRI CONTENT INDEX
ETHICS AND INTEGRITY
SPECIFIC CONTENTS
Economic impact
Environmental impact
Reporting period
Recent previousreporting period
Report cycle
Contact point (if any)
SUSTAINABILITY REPORT – Overview
SUSTAINABILITY REPORT – Overview
SUSTAINABILITY REPORT – Overview
SUSTAINABILITY REPORT – Overview
Year 2016
This is the 2nd year SHS has prepared the report
Yearly
SHS
SUSTAINABILITY REPORT
G4-LA1
G4-LA2
G4-LA10
G4-LA12
G4-HR5
G4-HR6
G4-SO1
G4-SO8
G4-PR3
Total number and rates of new employee hires and employee turnover by age group, gender, and region
Beneits provided to full-time employees
Programs for skills management
Composition of governance bodies and and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity
Child labor
Forced labor
Percentage of operations with implemented local community engagement, impact assessments, and development programs
Penalties
Type of products and services
SUSTAINABILITY REPORT - Sustainability Report 2016
SUSTAINABILITY REPORT - Sustainability Report 2016
SUSTAINABILITY REPORT - Sustainability Report 2016
SUSTAINABILITY REPORT - Sustainability Report 2016
SUSTAINABILITY REPORT - Sustainability Report 2016
SUSTAINABILITY REPORT - Sustainability Report 2016
SUSTAINABILITY REPORT - Sustainability Report 2016
SUSTAINABILITY REPORT - Sustainability Report 2016
ANNUAL REPORT – Overview
No child labor use
No forced labor use
Social impact
Human rights impact
Local Communities
143142
ANNUAL REPORT 2016
SHAREHOLDERRELATIONSHIP
Shareholder structure, change in owners’invested capital
Salary, bonus and incentives
Transactions of shares by insiders and related bodies
Agreement, transactions to insiders and related bodies
144
145 146
146
145144
ANNUAL REPORT 2016
((As of 24/03/2017 based on shareholder listing for 2017 AGM of SHS, prepared by VSD)
Common shares(100,000,000 shares)
1.1
1.2
1
2.1
2.2
2
3.1
3.2
3
4.1
4.2
4
Large shareholders
Minority shareholders
Total
Institutional shareholders
Individual shareholders
Total
Local shareholders
Foreign shareholders
Total
State shareholders
Others
Total
18,474,700
81,525,300
100,000,000
20,477,132
79,522,868
100,000,000
85,775,634
14,224,366
100,000,000
0
100,000,000
100,000,000
184,474,700,000
815,253,000,000
1,000,000,000,000
204,771,320,000
795,228,680,000
1,000,000,000,000
857,756,340,000
142,243,660,000
1,000,000,000,000
0
1,000,000,000,000
1,000,000,000,000
18.47
81.53
100.00
20.48
79.52
100.00
85.78
14.22
100.00
0
100
100.00
03
3,040
3,043
38
3,005
3,043
3,010
33
3,043
0
3,043
3,043
Limited shares(0 shares)
SHAREHOLDER STRUCTURE, CHANGEIN OWNERS’ INVESTMENT CAPITAL
Share
Shareholder structure
NO. TYPE VALUE (VND) OWNERSHIP (%)NUMBER OF SHARESNUMBER OF
SHAREHOLDERS
TOTAL 100.000.000 SHARES
Outstanding shares(100,000,000 shares)
Free loating shares(100,000,000 shares)
Treasury shares(0 shares)
Preferred shares(0 share)
SHAREHOLDER RELATIONSHIP
There was no change in owners’ investment capital in 2016
Treasury share transaction in 2016: No Number of treasury shares as of 31/12/2016: 0 shares
1
2
3
1
2
1
2
02/07/2015
30/10/2015
02/11/2015
22/03/2016
28/03/2016
16/09/2016
18/08/2016
02/07/2017
30/10/2017
02/11/2017
22/03/2018
28/03/2018
16/09/2018
18/08/2018
180
320
80
580
60
240
300
50
250
300
1,180
-
40
80
120
-
140
140
-
-
-
260
180
280
-
460
60
100
160
50
250
300
920
Treasury shares
Treasury shares
Other securities
TERMPAYMENT IN
THE YEAR (VND BILLION)
END OF THE YEAR
(VND BILLION)
BEGINNING OF THE YEAR
(VND BILLION)
EXPIRY DATE ISSUANCE DATE
Total
Total phase 2/2016
Total phase 1/2016
Total in 2015
Board of Directors
Board of Supervisory
Board of Management ( including compensations for executive titles)
5
3
4
2,724,617,918
1,061,304,862
8,133,290,968 (*)
3,900,000,000 97.07%
SALARY, BONUS, COMPENSATION AND OTHER INCENTIVES
SEGMENTNUMBER OF
MEMBERSSALARY, BONUS,
COMPENSATION IN 20162016 PLAN % OF 2016
PLAN
Unit: Billion VND
147146
ANNUAL REPORT 2016
TRANSACTION OF SHARES BY INSIDER SHAREHOLDERAND RELATED PARTIES
AGREEEMENT, TRANSACTION OF SHARESBY INSIDER SHAREHOLDER AND RELATED PARTIES
(*) In which:
- Income from salary: 5,037,679,828 VND- Income from business performance: 2,884,479,443 VND- Compensation and and allowance on salary: 211,131,697 VND
On 19/8/2016, Saigon Ha Noi Bank – Related party: Mr Do Quang Hien, Chairman and Mr. Le Dang Khoa, member of BOM sold 4.8 million shares through put-through transaction.
(Please refer to 2016 audited inancial statement)
SHAREHOLDER RELATIONSHIP
FINANCIALSTATEMENTS
148151153158161166167
Report of the Board of Management
Independent Auditors’ Report
Statements of Financial Position
Income Statement
Cash Flows
Statement of changes in equity
Notes to Financial Statements
149148
ANNUAL REPORT 2016
REPORT OF THE BOARD OF MANAGEMENT
COMPANY INFORMATION
THE BOARD OF DIRECTORS
The Board of General Directors of Sai Gon – Ha Noi Securities Joint Stock Company (the “Company”) presents its report and the Company’s Financial statements for the inancial year ended 31 December 2016 which are audited by the independent auditors.
Sai Gon - Ha Noi Securities Joint Stock Company has established and operated in accordance with the License of Securities Business Operation No. 66/UBCK – GP dated 15 November 2007 and the Latest Amendment License No. 32/GPĐC – UBCK dated 01 December 2014 issued by State Securities Commission of Vietnam.
The principal activities of the Corporation for the current year are as follows:
Securities brokerage;
Proprietary Investment;
Underwriting;
Securities investment advisory;
Securities depository;
Financial advisory and other inancial services;
Perform other activities in accordance with the law.
The Head Oice of the Company is located at 3rd loor, Union Trade Conference Center Building, No.1 Yet Kieu, Hoan Kiem district, Ha Noi.
The members of the Board of Directors during the year and at the date of this report are as follows:
Mr. DO QUANG HIEN - Chairman
Mr. VU DUC TIEN - Member
Mr. LE DANG KHOA - Member
Mr. MAI XUAN SON - Member
Ms. NGUYEN MINH PHUONG - Member (Appointed on 11 April 2016)
Mr. NGUYEN THANH QUANG - Member (Discharged on 11 April 2016)
FINANCIAL STATEMENTS
THE BOARD OF MANAGEMENT AND CHIEF ACCOUNTANT
AUDITORS
THE RESPONSILITY OF THE BOARD OF MANAGEMENT
Members of the Board of Management and the Chief Accountant during the year and at the date of this report are as follows:
Mr. VU DUC TIEN - General Director
Mr. TRAN SY TIEN - Vice General Director cum Chief Accountant
Mr. NGUYEN CHI THANH - Vice General Director cum Director of Ho Chi Minh Branch
Nam Viet Auditing and Accounting Financial Consulting Services Co., Ltd (AASCN) – Hanoi Branch has audited the inancial statements of the Company for the year ended 31 December 2016.
The Management is responsible for the Financial Statements state of affairs of the Company which give a true and fair view as at 31 December 2016 and of its operation results, cash lows and changes in equity for the inancial year ended same day, in accordance with Vietnamese Accounting Standards, accounting regime applicable to securities companies issued by the Ministry of Finance in accordance with Circular No.210/2014/TT-BTC dated 30 December 2014, Circular No.334/2016/TT-BTC dated 27 December 2016 modifying Circular No.210/2014/TT-BTC and legal regulations relating to prepare and present inancial statements. In preparing these Financial Statements, the Management is required to:
Select suitable accounting policies and then apply them consistently;
Make judgments and estimates that are reasonable and prudent;
Indicade whether the accounting standards applied to the Company have been complied with or not and all material misstatements have been disclosed and explained in the Financial Statements;
151150
ANNUAL REPORT 2016
Prepare the inancial statements on going concern basis unless it is inappropriate to presume that the Company will continue in business;
Establish and implement an internal control system effectively to mitigate the risk of material misstatement, whether due to fraud or error in the prepare and present the inancial statements.
The Board of Management is responsible for ensuring that proper accounting records are kept, which disclose, with reasonable accurancy at any time, the inancial position of the Company and that the inancial statements comply with Vietnamese Accounting Standards, accounting regime applicable to securities companies issued by the Ministry of Finance in accordance with Circular No.210/2014/TT-BTC dated 30 December 2014, Circular No. 334/2016/TT-BTC dated 27 December 2016 modifying Circular No.210/2014/TT-BTC and legal regulations relating to prepare and present inancial statements. It is also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of frauds and other irregularities.
The Board of Management commit that the Company has complied with the above requirements in preparing inancial statements.
Ha Noi, 29 March 2017
On behalf of the Board of Management
General Director
Vu Duc Tien
FINANCIAL STATEMENTS
We have audited the accompanying inancial Statements of Sai Gon – Ha Noi Securities Joint Stock Company for the inancial year ended 31 December 2016 prepared on 29 March 2016 as set out on pages 06 to 54 attached, which comprise the Statement of inancial position as at 31 December 2016, Income Statement, the Cash Flow Statement, Statement of changes in equity for the inancial year ended on same day and the Notes to Financial Statements.
The Board of Management is responsible for the preparation and fair presentation of these Financial Statements in accordance with Vietnamese Accounting Standards, accounting regime applicable to securities companies issued by the Ministry of Finance in accordance with Circular No. 210/2014/TT-BTC dated 30 December 2014, Circular No. 334/2016/TT-BTC dated 27 December 2016 modiies Circular No.210/2014/TT-BTC and legal regulations relating to prepare and present inancial statements and for such internal control as management determines is necessary to enable the preparation of inancial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on the accompanying inancial statements based on our audit. We conducted our audit in accordance with Vietnamese Auditing Standards. These standards require us to comply regulations about professional ethics, plan and perform our audit to obtain a reasonable assurance about whether the inancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the inancial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the inancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the inancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of General Directors, as well as evaluating the overall presentation of the inancial statements.
We believe that the audit evidence we have obtained is suicient and appropriate to provide a basis for our audit opinion.
To: THE BOARD OF MANAGEMENT AND THE BOARD OF GENERAL DIRECTORSS
SAI GON – HA NOI SECURITIES JOINT STOCK COMPANY
INDEPENDENT AUDITORS’ REPORT
Responsibility of the Board of Management
Auditors’ Responsibility
Reference No. : 81/2017/BCKT-TC2
153152
ANNUAL REPORT 2016
In our opinion, the Financial Statements give a true and fair view, in all material respects, of the inancial position of the Company as at 31 December 2016, and of the results of its operations, its cash lows and its chances in eqity for the year ended in accordance with the Vietnamese Accounting Standard, accounting regime applicable to securities companies issued by the Ministry of Finance in accordance with Circular No. 210/2014/TT-BTC dated 30 December 2014, Circular No. 334/2016/TT-BTC dated 27 December 2016 modiies Circular No.210/2014/TT-BTC and legal regulations relating to prepare and present inancial statements.
Without denying mentioned opinons, we want to note to inancial statements’ reader that: as stated in Note III, since 01 January 2016, the Company has adopted Circular No. 210/2014/TT-BTC issued by the Ministry of Finance on 30 December 2014 (“Circular 210”); Circular No. 334/2016/TT-BTC dated 27 December 2016 modiies Circular No. 210 guiding the accounting regime for securities companies. Accordingly, certain igures of the statement of inancial position as at 31 December 2016, of the income statement, of the cash lows and of the statement of changes in equity for the inancial year ended 31 December 2015 have been reclassiied for the comparability purpose due to effects of adoption of Circular 210/2014/TT-BTC and Circular 334/2016/TT-BTC on the preparation and presentation of the inancial statements.
Auditors’ opinion
Emphasis of matters
Ha Noi, 29 March 2017
Auditor-in-charge
Mai Van Cong
Registered Auditor Certiicate No. 2920-2014-152-1
Hà Nội, ngày 29 tháng 3 năm 2017
Vice Director
Bui Ngoc Vuong
Registered Auditor Certiicate No. 0941-2013-152-1
Nam Viet Auditing and Accounting Financial
Consulting Services Co., Ltd – Hanoi Branch
FINANCIAL STATEMENTS
As at 31 December 2016
STATEMENT OF FINANCIAL POSITION
A.
I.
1.
1.1
1.2
2.
4.
6.
7.
7.2
7.2.1
7.2.2
8.
9.
12.
13.
II.
1.
2.
3.
4.
6.
CURRENT ASSETS(100 = 110 + 130)
SHORT- TERM FINANCIAL ASSETS
Cash and cash equivalents
Cash
Cash equivalents
Financial assets ai fair value through proit or loss
Loans receivable
Provision for impairment of inancial assets and collaterals
Receivables
Dividends and accrued interests receivable from inancial assets
Receivables from due dividend and interest income
Undue dividends and accrued interests receivable from inancial assets
Advances to suppliers
Receivables from services rendered
Other receivables
Provision for impairment of recaivable (*)
OTHER CURRENT ASSETS
Advances
Oice supplies, tools
Short-term prepaid expenses
Short-term mortgages deposits collaterals and pledges
Tax and receivables from state budget
100
110
111
111.1
111.2
112
114
116
117
117.2
117.3
117.4
118
119
122
129
130
131
132
133
134
136
VI.01
VI.03.01
VI.03.02
VI.03.03
VI.04.01
VI.04.03
VI.04.04
VI.05
VI.06
VI.07
3,295,992,037,925
3,272,457,618,782
361,552,797,249
361,552,797,249
-
769,524,155,991
1,714,385,482,679
(118,565,977,098)
16,807,997,619
16,807,997,619
16,807,997,619
-
85,318,478,750
722,694,703,698
1,041,661,280
(280,301,681,386)
23,534,419,143
10,501,080,097
139,255,107
702,885,409
2,750,000
12,188,448,530
2,860,910,146,634
2,845,090,226,493
340,163,382,922
265,163,382,922
75,000,000,000
1,247,596,319,016
1,167,096,572,535
(88,331,723,120)
16,400,753,792
16,400,753,792
16,082,304,412
318,449,380
85,305,745,000
352,421,457,765
18,041,684
(275,580,323,101)
15,819,920,141
2,979,632,097
145,913,733
503,175,781
2,750,000
12,188,448,530
No. ASSETS OPENING BALANCECLOSING BALANCENOTESCODE
155154
ANNUAL REPORT 2016
B.
I.
II.
1.
3.
III.
IV.
V.
1.
2.
4.
VI.
NON-CURRENT ASSETS (200=210+220+230+240+250-260)
LONG-TERM FINANCIAL ASSETS
FIXED ASSETS
Tangible ixed assets
- Cost
- Accumulated depreciation (*)
Intangible ixed assets
- Cost
- Accumulated depreciation (*)
INVESTMENT PROPERTIES
CONSTRUCTIONIN PROGRESS
OTHER LONG-TERM ASSETS
Long-term mortgages deposits collaterals and pledges
Long-term prepaid expenses
Deposit to Settlement support fund
PROVISION FOR IMPAIRMENT OF FINANCIAL ASSETS
TOTAL ASSETS(270=100+200)
200
210
220
221
222
223a
227
228
229a
230
240
250
251
252
254
260
270
VI.09
VI.10
VI.07
VI.08
18,385,779,565
-
3,521,762,958
2,946,431,421
17,746,068,209
(14,799,636,788)
575,331,537
20,970,056,987
(20,394,725,450)
-
-
14,864,016,607
1,908,740,598
1,651,685,539
11,303,590,470
-
3,314,377,817,490
14,704,952,329
-
2,298,915,976
1,363,156,532
14,991,359,209
(13,628,202,677)
935,759,444
20,675,056,987
(19,739,297,543)
-
-
12,406,036,353
1,822,533,535
2,384,162,545
8,199,340,273
-
2,875,615,098,963
FINANCIAL STATEMENTS
C.
I.
1.
1.1
6.
9.
10.
11.
12.
13.
16.
17.
19.
II.
4.
5.
7.
D.
I.
1.
1.1
1.2
4.
5.
7.
7.1
7.2
II.
LIABILITIES (300=310+340)
CURRENT LIABILITIES
Short-term loans and obligations under inance leases
Short-term loans
Payables for securities transaction
Short-term advances from customers
Tax payables and statutory obligations
Payables to employees
Employee beneits
Short-term accrued expenses
Short-term deposits, collaterals and pledges from others
Other current liabilities
Bonus and welfare fund
NON-CURRENT LIABILITIES
Long-term bonds
Long-term trade payables
Long-term accrued expenses
EQUITY(400=410+420)
OWNERS’ EQUITY
Contributed capital
Charter capital
a. Ordinary shares have the right to vote
b. Preferred shares
Share premium
Charter capital supplementary reserve
Operational risk and inancial reserve
Undistributed proit
Realized proit
Unrealized proit
OTHER SOURCES AND FUNDS
TOTAL LIABILITIES AND OWNERS’ EQUITY (440=300+400)
300
310
311
312
318
321
322
323
324
325
328
329
331
340
346
347
349
400
410
411
411.1
411.1a
411.1b
411.2
414
415
417
417.1
417.2
440
VI.24
VI.18
VI.20
VI.21
VI.23
VI.25
VI.22
VI.21
VI.27
2,200,891,871,259
1,259,544,184,458
503,500,000,000
503,500,000,000
6,798,151,035
91,001,850,000
8,348,338,059
4,974,301,225
92,733,300
22,680,855,554
613,355,143,287
7,783,643,631
1,009,168,366
941,347,686,801
920,000,000,000
14,025,690
21,333,661,111
1,113,485,946,231
1,113,485,946,231
1,000,310,000,000
1,000,000,000,000
1,000,000,000,000
-
310,000,000
8,057,812,432
8,057,812,432
97,060,321,367
97,060,321,367
-
3,314,377,817,490
1,847,718,855,199
1,253,836,940,620
517,000,000,000
517,000,000,000
8,924,818,000
851,000,000
5,895,495,290
1,732,139,896
855,747,180
5,341,400,135
711,270,551,312
1,826,620,441
139,168,366
593,881,914,579
580,000,000,000
14,025,690
13,867,888,889
1,027,896,243,764
1,027,896,243,764
1,000,310,000,000
1,000,000,000,000
1,000,000,000,000
-
310,000,000
7,420,555,826
7,420,555,826
12,745,132,112
12,745,132,112
-
2,875,615,098,963
NO. RESOURCE OPENING BALANCECLOSING BALANCENOTESCODE
157156
ANNUAL REPORT 2016
A.
2.
3.
6.
8.
9.
12.
B.
1.
a.
b.
c.
d.
e.
f.
2.
a.
b.
c.
3.
COMPANY’S ASSETS AND ASSETS MANGAGED UNDER COMMITMENTS
Certiicates are held in custody
Mortgaged assets
Outstanding shares
The Company’s inancial assets listed/registered for trading at the Vietnam Securities Depository
The Company’s inancial assets which have not been traded at the Vietnam Securities Depository
The Company’s inancial assets which have not been registered at the Vietnam Securities Depository
ASSETS AND LIABILITIES IN CUSTODY
The investors’ inancial assets listed/registered for trading at the Vietnam Securities Depository
Transferable inancial assets
Limited trading inancial assets
Collateralized inancial assets
Blocked inancial assets
Financial assets to be settled
Financial assets await loans
The investors’ inancial assets registered but not trading at the Vietnam Securities Depository
Transferable inancial assets
Limited trading inancial assets
Not traded, pledged inancial assets
Awaiting inancial assets of the Investors
002
003
006
008
009
012
021
021.1
021.2
021.3
021.4
021.5
021.6
022
022.1
022.2
022.3
023
VI.28.01
VI.28.02
VI.28.03
VI.11
VI.12
VI.13
VI.28.05
VI.14
VI.16
VI.15
1,500,000,000
15,036,660,000
1,000,000,000,000
420,357,360,000
1,500,600,000
83,364,940,000
13,067,977,750,000
10,530,745,200,000
856,068,450,000
1,388,709,090,000
32,000,000,000
260,455,010,000
-
8,715,090,000
8,715,090,000
-
-
482,133,670,000
1,500,000,000
15,936,660,000
1,000,000,000,000
524,280,740,000
1,500,600,000
88,400,000,000
9,014,898,770,000
6,562,817,160,000
497,892,740,000
1,656,739,190,000
10,000,000,000
287,449,680,000
-
1,243,918,340,000
420,783,340,000
135,000,000
823,000,000,000
562,857,380,000
No. ITEMS OPENING BALANCECLOSING BALANCENOTESCODE
FINANCIAL STATEMENTS
7.
7.1
7.2
7.3
a.
b.
7.4
8.
8.1
8.2
12.
Investors’ deposits
Deposits for securities trading
Deposit deposited securities transactions for clients
Deposits for clearing and settlement of trading securities
Domestic investor’s deposits for clearing and settlement of trading securities
Foreign investor’s deposits for clearing and settlement of trading securities
Deposits of securities issuers
Payables to investors – investors’ deposits for securities trading activities managed by commecial banks
Payables to investors – domestic investors’ deposits for securities trading activities managed by commecial banks
Payables to investors – foreign investors’ deposits for securities trading activities managed by commecial banks
Dividends, bond principals and interests payable
026
027
028
029
029.1
029.2
031
031.1
031.2
35
VI.26
VI.17
VI.17
VI.17
VI.17
VI.28.06
VI.19
644,279,232,630
372,305,181,230
271,759,124,500
-
-
-
214,926,900
644,064,305,730
644,038,924,833
25,380,897
214,926,900
484,856,494,094
172,015,449,511
300,114,855,189
12,556,401,811
12,515,227,234
41,174,577
169,787,583
484,761,056,844
484,163,438,833
597,618,011
95,437,250
Ha Noi, 29 March 2017
General Director
Vu Duc Tien
Hà Nội, ngày 29 tháng 3 năm 2017
Prepared by
Nguyen Thi Thuy
Hà Nội, ngày 29 tháng 3 năm 2017Chief Accountant
Tran Sy Tien
OFF-BALANCE SHEET ITEMS
159158
ANNUAL REPORT 2016
INCOME STATEMENT
NO. ITEMS PREVIOUS YEARCURRENT YEARNOTESCODE
FINANCIAL STATEMENTS
Year 2016
I.
1.1
a.
c.
1.3
1.6
1.7
1.8
1.9
1.10
1.11
II.
2.1
a.
c.
2.4
2.6
2.7
2.8
2.9
2.10
2.11
2.12
III.
3.2
IV.
4.2
4.5
V.
VI.
VII.
VIII.
8.1
8.2
IX
9.1
9.2
OPERATING INCOME
Gain from inancial assets at fair value through proit and loss (FVTPL)
Gain from disposal of inancial assets at PVTPL
Dividend, interest income from inancial assets at PVTPL
Gain from loans and receivables
Revenue from brokerage services
Revenue from underwriting and issuance agent services
Revenue from securities investment consulting services
Revenue from securities custodian services
Revenue from inancial advisory activities
Revenue from other activities
Total operating revenue (20=0111)
OPERARING EXPENSES
Loss from inancial assets at fair value through proit and loss (FVTPL)
Loss from disposal of inancial assets at FVTPL
Transaction costs of acquisition of inancial assets at FVTPL
Provision for inancial assets, handling of bad debts and losses on inancial assets and borrowing costs of loans
Expenses for proprietary trading activities
Expenses for brokerage services
Expenses for underwriting and issuance agent services
Expenses for securities investment consulting services
Expenses for securities custodian services
Expenses for inancial advisory activities
Expenses for other activities
Total operating expenses (40=2132)
FINANCIAL INCOME
Non-ixed dividend and interest income
Total inance income(50 = 4144)
FINANCIAL EXPENSES
Borrowing costs
Other inance expenses
Total inancial expenses(60=5155)
SELLING EXPENSES
GENERAL AND ADMINISTRATIVE EXPENSE
OPERATING PROFIT(70=20+50-40-60-61-62)
OTHER INCOME AND EXPENSES
Other income
Other expenses
Total other operating proit(80=71-72)
PROFIT BEFORE TAX(90=70+80)
Realized proit
Unrealized proit
01
01.1
01.3
03
06
07
08
09
10
11
20
21
21.1
21.3
24
26
27
28
29
30
31
32
40
42
50
52
55
60
61
62
70
71
72
80
90
91
92
VII.01
VII.01
VII.03
VII.03
VII.03
VII.03
VII.03
VII.03
VII.02
VII.04
VII.05
VII.06
VII.07
218,971,157,497
165,593,794,166
53,377,363,331
158,067,255,437
115,656,855,552
535,000,000
45,176,359,659
9,280,754,541
5,184,828,453
10,465,826,517
563,338,037,656
32,439,097,488
32,020,042,017
419,055,471
140,411,554,720
4,441,462,276
100,057,158,050
1,926,937
2,151,467,680
7,604,634,235
10,936,578,377
10,760,126,174
308,804,005,937
2,612,471,651
2,612,471,651
135,071,212,226
120,000,000
135,191,212,226
-
35,408,637,438
86,546,653,706
45,639,961
2,591,200
43,048,761
86,589,702,467
86,589,702,467
-
199,636,584,389
152,740,811,094
46,895,773,295
132,813,013,379
115,222,442,972
5,350,000,000
46,478,824,308
7,096,566,979
8,764,701,333
1,483,055,791
516,845,189,151
52,301,595,463
51,695,927,188
605,668,275
158,913,063,233
2,133,060,093
59,708,145,650
-
6,319,233,067
5,792,220,722
8,774,238,034
4,670,779,864
298,612,336,126
1,913,871,068
1,913,871,068
69,854,247,042
-
69,854,247,042
-
31,828,832,615
118,463,644,436
75,414,637
300,979,811
(225,565,174)
118,238,079,262
118,238,079,262
-
161160
ANNUAL REPORT 2016FINANCIAL STATEMENTS
(Prepared in indirect method)
Year 2016
CASH FLOW STATEMENT
Ha Noi, 29 March 2017
General Director
Vu Duc Tien
Hà Nội, ngày 29 tháng 3 năm 2017
Prepared by
Nguyen Thi Thuy
Hà Nội, ngày 29 tháng 3 năm 2017Chief Accountant
Tran Sy Tien
X.
10.1
10.2
XI.
XII.
XIII.
13.1
CORPORATE INCOME TAX EXPENSES (CIT)
Current CIT expense
Deferred CIT expense
PROFIT AFTER TAX(200=90-100)
OTHER COMPREHENSIVE INCOME (LOSS) AFTER TAX
NET INCOME PER SHARE
Earning per share (VND/share)
100
100.1
100.2
200
300
500
501
VII.08 -
-
-
86,589,702,467
-
866
866
-
-
-
118,238,079,262
-
1,183
1,183
NO. ITEMS PREVIOUS YEARCURRENT YEARNOTESCODE
I.
1.
2.
-
-
-
-
3.
4.
5.
-
-
-
-
-
-
-
-
-
-
CASH FLOWS FROM OPERATING ACTIVITIES
Proit before corporate income tax
Adjustments for
Depreciation and amortization
(Reversal) of provisions/Provisions
Interest expenses
Accrued interest income
Increase in non-monetary expenses
Decrease in non-monetary income
Operating income before changes in working capital
Increase (decrease) in inancial assets at fair value through proit or loss FVTPL
Increase (decrease) in loans receivable
(-) Increase, (+) decrease in dividends and accrued interests receivable from inancial assets
(-) Increase, (+) decrease in receivables from services rendered
(-) Increase, (+) decrease in other receivables
Increase (decrease) in other assets
Increase (decrease) accrued expenses (excluding interest expenses)
Increase (decrease) in prepaid expenses
(-) Interest expenses paid
Increase (decrease) in trade payables
01
02
03
04
06
08
10
18
30
31
33
36
37
39
40
41
42
44
45
86,589,702,467
171,127,993,300
1,826,862,018
34,955,612,263
135,071,212,226
(725,693,207)
-
-
(559,778,572,440)
478,072,163,025
(547,288,910,144)
318,449,380
(370,273,245,933)
(1,023,619,596)
(10,631,773,321)
(1,472,934,111)
532,767,378
(116,258,822,696)
-
118,238,079,262
114,736,950,167
3,717,085,283
45,818,964,401
69,854,247,042
(4,653,346,559)
-
-
(1,773,553,109,630)
(489,863,280,671)
(520,011,625,424)
(4,653,346,559)
(124,631,627,986)
3,309,296,086
(3,153,848,992)
2,654,766,504
431,812,060
(72,509,013,546)
(99,304,260)
163162
ANNUAL REPORT 2016FINANCIAL STATEMENTS
IV.
V.
-
-
-
VI.
-
-
-
II.
1.
2.
5.
III.
2.
3.
3.2
4.
4.3
6.
NET DECREASE/INCREASE IN CASH
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR
Cash at banks at the beginning of the year
Cash at banks for operation of the Company
Cash equivalents
Foreign exchange differences
CASH ANF CASH EQUIVALENTS AT THE END OF THE YEAR
Cash at banks at the beginning of the year
Cash at banks for operation of the Company
Cash equivalents
Foreign exchange differences
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase and construction of ixed assets, investment properties and other assets
Proceeds from disposal and sale of ixed assets, investment properties and other assets
Interest and dividends from long-term investments received
Net cash lows investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of capital contributed by shareholders, repurchase of issued shares
Drawdown of borrowings
Other loans
Repayment of borrowings
Other repayment of borrowings
Dividends, proit distributed to shareholders
Net cash low from inancing activities
90
101
102
102.1
102.2
102.3
103
104
104.1
104.2
104.4
61
62
65
70
72
73
73.2
74
74.3
76
80
21,389,414,327
340,163,382,922
265,163,382,922
75,000,000,000
-
361,552,797,249
361,552,797,249
361,552,797,249
-
-
(3,049,709,000)
-
-
(3,049,709,000)
-
2,917,754,309,039
2,917,754,309,039
(2,591,254,309,039)
(2,591,254,309,039)
-
326,500,000,000
(730,428,149,260)
1,070,591,532,182
805,941,532,182
264,650,000,000
-
340,163,382,922
340,163,382,922
265,163,382,922
75,000,000,000
-
(686,744,897)
12,295,455
176,969,311,183
176,294,861,741
1,860,000,000
1,864,000,000,000
1,864,000,000,000
(1,232,000,000,000)
(1,232,000,000,000)
(4,930,800)
633,855,069,200
-
-
-
-
-
-
Increase (decrease) in deductions for employee beneits
Increase (decrease) in tax payables and statutory obligations excluding paid CIT
Increase (decrease) in payables to employees
Increase (decrease) in other payables
Other receipts from operating activities
Other payments for operating activities
Net cash lows from operating activities
46
47
48
50
51
52
60
(763,013,880)
2,452,842,769
3,242,161,329
3,531,570,422
870,000,000
(1,086,207,063)
(302,060,876,673)
75,745,040
(1,552,512,575)
(209,212,434)
(563,169,962,489)
10,244,400,000
(10,415,394,384)
(1,540,578,080,201)
165164
ANNUAL REPORT 2016
CASH FLOWS FROM BROKERAGE AND TRUST ACTIVITIES OF THE CUSTOMERS
I.
1.
2.
7.
9.
10.
11.
12.
13.
II.
-
-
-
-
-
CASH FLOWS FROM BROKERAGE AND TRUST ACTIVITIES OF THE CUSTOMERS
Cash receipt from disposal of securities on behalf of customers
Cash payment for acquisition of securities on behalf of customers
Cash receipt for settlement of securities transactions of customers
Cash payment for custodian fees of customers
Cash receipt for error securities transactions
Cash payment for error securities transactions
Cash receipt from securities issuers
Cash payment to securities issuers
Net increase/ decrease in cash during the year
CASH AND CASH EQUIVALENTS OF CUSTOMERS AT THE BEGINNING OF THE YEAR
Cash at bank at the beginning of the year
Investors’ deposits managed by the Company
In which term deposits
Deposits for settlement of securities transaction payments
In which term deposits
Deposit deposited securities transactions for clients
Deposits of securities issuers
1
2
7
9
10
11
12
13
20
30
31
32
33
34
35
37,735,701,103,880
(36,672,186,088,530)
(898,135,881,169)
(6,066,249,895)
2,000,000
(2,000,000)
594,992,645,946
(594,882,791,696)
159,422,738,536
484,856,494,094
484,856,494,094
172,015,449,511
-
12,556,401,811
-
300,114,855,189
169,787,583
36,517,524,303,700
(35,498,240,281,400)
(1,060,537,198,855)
(6,818,605,290)
-
-
627,933,108,537
(627,976,089,787)
(48,114,763,095)
532,971,257,189
532,971,257,189
209,102,202,299
-
128,817,474,485
-
195,051,580,405
-
No. ITEMS PREVIOUS YEARCURRENT YEARNOTESCODE
III.
-
-
-
CASH AND CASH EQUIVALENTS OF THE CUSTOMERS AT THE END OF THE YEAR
Cash at banks at the end of the year
Investors’ deposits managed by the Company for securities trading activities
In which term deposits
Deposit deposited securities transactions for clients
Deposit clearing and settlement of securities transactions
Deposits of securities issuers
40
41
42
43
44
45
644,279,232,630
644,279,232,630
372,305,181,230
-
271,759,124,500
-
214,926,900
484,856,494,094
484,856,494,094
172,015,449,511
-
300,114,855,189
12,556,401,811
169,787,583
Ha Noi, 29 March 2017
General Director
Vu Duc Tien
Hà Nội, ngày 29 tháng 3 năm 2017
Prepared by
Nguyen Thi Thuy
Hà Nội, ngày 29 tháng 3 năm 2017Chief Accountant
Tran Sy Tien
FINANCIAL STATEMENTS
167166
AN
NU
AL
RE
PO
RT
20
16
STATEM
ENT O
F CH
AN
GES IN
OW
NER
S’ EQU
ITYN
OTES TO
THE FIN
AN
CIA
L STATEM
ENTS
OPERA
TION
CH
ARA
CTERISTIC
S
SaiGon - Ha Noi Securities Joint Stock Company is incorporated and operated under the Securities Operation
License No. 66/UBCK-GP dated 15th November 2017 and the latest Am
endment License No. 32/GPĐC – UBCK
issued on 1st December 2014 by the State Securities Com
mission.
The Company’s chartered capital under the Operation License is VND 1,000,000,000,000.
The Company operates under the Articles of Association prom
ulgated on 3rd December 2007, am
ended and supplem
ented on 27th April 2015.
The Company’s registered oi
ce is located at 3rd loor, Trade Union Conference Center Building, No. 1 Yet Kieu, HoanKiem
District, Hanoi City. Moreover, the Com
pany’s subordinates are also available as follows:
1. The C
om
pany’s capital scale
The C
om
pany’s B
ranch in H
o Ch
i Min
h City
The C
om
pany’s B
ranch in D
a Nan
g C
ity
3rd loor,
Artex Saigon
Buildings, No.
236-238 Nguyen Cong Tru, Nguyen Thai Binh W
ard, District 1, Ho Chi M
inh City
No. 97 Le Loi, ThachThang Ward, HaiChau District,
Da Nang City
Op
eration License of Securities C
omp
any
Conta
ct ad
dress of the Securities C
omp
any
Ma
in opera
tion features
Articles of A
ssociation
I. CHANGES IN
OWNERS’ EQUITY
1. Share capital
1.1. Ordinary shares have
the right to vote
1.3. Surplus share
premium
2. Treasury shares (*)
3. Charter capital
supplementary reserve
4. Operational risk and
inancial reserve fund
8. Undistributed proit
8.1. Realized after tax
proit
1,000,310,000,000
1,000,000,000,000
310,000,000
-
7,420,555,826
7,420,555,826
12,745,132,112
12,745,132,112
-
-
-
-
-
-
(2,274,513,212)
(2,274,513,212)
-
-
-
-
637,256,606
637,256,606
86,589,702,467
86,589,702,467
(108,234,052,000)
-
(108,234,052,000)
1,550,000,000
-
-
-
-
310,000,000
-
310,000,000
-
-
226,472,131,262
226,472,131,262
1,000,310,000,000
1,000,000,000,000
310,000,000
-
7,420,555,826
7,420,555,826
12,745,132,112
12,745,132,112
1,108,234,052,000
1,000,000,000,000
108,234,052,000
(1,550,000,000)
7,420,555,826
7,420,555,826
(213,726,999,150)
(213,726,999,150)
1,000,310,000,000
1,000,000,000,000
310,000,000
-
8,057,812,432
8,057,812,432
97,060,321,367
97,060,321,367
1 JANUARY 2016
31 DECEMBER 2015
1 JANUARY 2015
31 DECEMBER 2015
BEGINNING BALANCE ENDING BALANCEINCREASE/(DECREASE)
PREVIOUS YEAR
INCREASE INCREASEDECREASE DECREASE
CURRENT YEARITEMS
1.113.485.946.2311.027.896.243.764(2.274.513.212?)87.864.215.679(106.684.052.000)226.782.131.2621.027.896.243.764907.798.164.502Total
Year 2
016Y
ear 2016
Ha Noi, 29 March 2017
General Director
Vu Duc Tien
Hà Nội, ngày 29 tháng 3 năm 2017
Prepared by
Nguyen Thi Thuy
Hà Nội, ngày 29 tháng 3 năm 2017Chief Accountant
Tran Sy Tien
FINANCIAL STATEM
ENTS
169168
ANNUAL REPORT 2016
It is complied with Article 44 of the Circular No. 210/2012/TT-BTC of the Ministry of Finance dated 30th November 2012 and the Circular No. 07/2016/TT-BTC dated 18th January 2016. Concretely:
The Company shall not acquire and contribute capital to acquire properties unless it is used as the registered oice, branches and transaction oices, directly facilitating the operations of the Securities Company.
The Company acquires the properties as prescribed in Clause 1 of this Article and ixed assets in accordance with the remaining value of properties and ixed assets, not exceeding ifty percent (50%) of total asset value.
Over seventy percent (70%) of owner’s equity shall not be used to invest in corporate bond acquisition or pool into other entities, not exceeding twenty percent (20%) of owner’s equity to invest into the unlisted companies.
The Company shall not directly involve in or authorize other organizations and individuals to:
Invest into the shares or the Company’s contributed capital, holding over ifty percent (50%) of the securities company’s chartered capital, unless the odd lot acquisition of shares as per request of the clients;
Invest over ive percent (5%) of chartered capital of other securities companies in combination with the related persons;
Invest over twenty percent (20%) of total outstanding shares and certiicate of shares of a listed entity;
Invest over ifteen (15%) of total shares and certiicates of shares of an unlisted entity, such regulation is not applied for the member certiicate of shares, fund for portfolio exchange and open funds;
Invest or contribute capital over ten percent (10%) of total contributed capital of a liability limited company or business project.
Invest or contribute capital over ifteen percent (15%) of owner’s equity into an organization or business project.
Invest over seventy percent (70%) of owner’s equity into shares, contributed capital and business project, which not over twenty percent (20%) of owner’s equity shall not be invested into the unlisted shares, contributed capital and business project.
3. The Company’s investment restrictions
The Company’s business ields cover securities business in accordance with the regulations of the laws, the activities include:
Securities brokerage;
Proprietary trading;
Securities underwriting;
Securities Investment Advisory;
Securities depository;
Corporate inance advisory and other inancial services.
2. Investment objectives
-
-
-
-
-
-
-
The following conditions must be satisied by the securities company which is expected to incorporate or reacquire the fund management company as subsidiary:
Owner’s equity upon capital contribution for fund management company acquisition and incorporation must be at least equal to the legal capital for the business operations which are being launched by the Company;
Liquid capital ratio upon capital contribution for fund management company acquisition and incorporation must be at least one hundred and eighty percent (180%);
Upon capital contribution for fund management company acquisition and incorporation, the Company must minimize the loans as prescribed in Article 42 of the Circular No. 210/2012/TT-BTC and investment as prescribed in clause 3 and point e, clause 4, Article 44 of the Circular No.210/2012/TT–BTC.
In the event that the exceeding investment is made by the Securities Company due to issuance of warranty guarantee under the secured commitment form due to incorporation, merger or changes in assets and owner’s equity of the securities company or capital contributor, the necessary measures must be taken to comply with the investment limit as prescribed in clauses 2, 3 & 4 of this Article within one (01) year.
Since 1st January 2016, the Company has applied the Circular No. 210/2014/TT-BTC of the Ministry of Finance dated 30th December 2014 (“Circular No. 210”); the Circular No. 334/2016/TT-BTC dated 27th December 2016 on amending the Circular No. 210 (“the Circular No. 334”) on guiding the applicable accounting for the securities companies. This Circular is valid since 1st January 2016. Accordingly, some disclosures of the Statements of Financial Position as of 31st December 2015, the Income Statements, Cash Flow Statement and Statement on Owner’s Equity Change for the inancial year ended on 31st December 2015 have been re-classiied for comparison purpose due to inluence of application of the Circular No. 210 and the Circular No. 334 on preparation and presentation of the Financial Statements.
List of non-incorporated and dependent accounting subordinate units
Notes on information comparison in the Financial Statements
-
-
-
-
The Company’s Branch in Ho Chi Minh City
The Company’s Branch in Da Nang City
3rd loor, Artex Saigon Buildings, No. 236-238 Nguyen Cong Tru, Nguyen Thai Binh Ward, District 1, Ho Chi Minh City
No. 97 Le Loi, ThachThang Ward, HaiChau District, Da Nang City
FINANCIAL STATEMENTS
171170
ANNUAL REPORT 2016
FINANCIAL YEAR, ACCOUNTING CURRENCY
ADOPTION OF NEW ACCOUNTING GUIDANCE
APPLICABLE ACCOUNTING POLICIES
The Company’s inancial year starts on 1st January and ends on 31st December every year..
Accounting currency is Vietnam Dong (VND).
The financial year
Accounting currency
Estimates
New guidance on corporate accounting policies
The Company applies the accounting policies for securities company promulgated by the Ministry of Finance under the Circular No.210/2014/TT-BTC dated 30th December 2014 and the Circular No.334/2016/TT-BTC promulgated on 27th December 2016 by the Ministry of Finance on amending the Circular No.210 on guiding the applicable accounting for the securities company. Such Circulars specify the regulations on accounting vouchers, chart of accounts as well as how to prepare and present the inancial statements of the securities company.
The purpose of the accompanying Financial Statements is not to relect the inancial position, operation performance, cash low statement and changes in owner’s equity in accordance with the widely accepted accounting principles and practices in other counties, out of Vietnam.
Preparation of the Financial Statements is complied with the accounting standards and policies applied for the Securities Company issued in attachment with the Circular No.210/2014/TT-BTC dated 30th December 2014, the Circular No.334/2016/TT-BTC dated 27th December 2016 on amending the Circular No.210 and the related legal regulations on preparing and presenting the Financial Statements. Accordingly, the Board of Management is required to release the have the estimates and assumptions affecting the disclosures on liabilities, assets and presentation of potential liabilities and assets as of date of inancial statements as well as the disclosures on revenue and costs in the inancial year. Although the estimates are released to the best knowledge of the Board of Management, the actual operation performance may be different from the set estimates and assumptions.
Principles of recording cash and cash equivalents
Principle and method of financial accounting to record P&L, investments held to maturity, loans
and receivables, financial assets available for sales, financial liabilities
The cash includes cash, bank deposit and cash in transit.
The cash equivalents refer to the short-term investments not over 03 months which may be easily capitalized and not characterized by a series of risk in capitalization since such investments are acquired.
Deposit for setting off the securities transactions refers to the amount that is willingly paid to set off the deals by the company.
Investors’ deposit for securities acquisition is presented in the off-balance sheets.
Financial assets are classiied into following type by its nature and ownership as of the acquisition date:
Financial assets recorded at fair value through proit or loss (“FVTPL”)
The inancial assets classiied by FVTPL when it is held for buy-in and sales-out in the inancial market through study and analysis with proitable expectation.
Investments held to maturity (HTM)
Investments held to maturity refer to the non-derivative inancial assets with the ixed or determinable payments, characterized by ixed maturity that the Company has the active intention and holding capacity as of due date, except for:
Non-derivative inancial assets which have been classiied as group recorded at FVTPL on the acquisition date;
Non-derivative inancial assets have been classiied into the group available for sales (AFS);
Non-derivative inancial assets are satisied with the deinitions on loans and receivable accounts.
Financial assets held to maturity are initially recorded in accordance with the buying rate plus the direct transaction costs originated from acquisition of such assets. Upon initial recognition, the inancial assets held to maturity are recorded in accordance with the allocated value under the effective interest method.
1. Principle on classifying the inancial assets
FINANCIAL STATEMENTS
173172
ANNUAL REPORT 2016
Loans
Loans refer to the non-derivative assets with ixed or determinable payments not listed in the market.
Applicable loan commitment forms:
Margin inancing contracts.
Advance payment contract for securities sales.
Financial assets available for sales (AFS)
AFS refers to the non-derivative inancial assets to be determined as available for sales or not classiied as the loans, receivables, investments held to maturity or FVTPL.
Such AFS is initially recorded in accordance with the buying rate plus the direct transaction costs originated from acquisition of such assets.
Investments are initially determined in accordance with the historical price (buying price plus the acquisition costs) less the accumulated interest before the actual acquisition date (if any). In the next inancial years, the investments are recorded in accordance with the initial value less the provisions for investment.
The provisions are made when the value of the investments to be recorded in the accounting books is higher than the market value or subject to impairment of the investments on the date of inishing the accounting period. Increase or decrease in outstanding balance for provision is posted into the inancial expenses in the comprehensive income statement.
Market value used to make provision for devaluation of securities investments is determined as follows:
For the listed securities, it is the closing price on the nearest date available in HNX and HOSE as of the date of provision;
For the subscribed securities (shares are subscribed at UPCOM), it is the closing price on the nearest dealing date as of the date of provision;
For the unlisted and non-subscribed securities, it is the average price of the actual dealing rates as quoted by 03 securities companies whom deals are initiated on the date nearest to the date of provision, provided that not over one month as of the date of provision. In the event that no deals are available for the securities beyond one month, provision shall not be made; Asit is impossible to identify the unlisted securities’ market price, the provision is not made by the Company.
For the list securities to be canceled or suspended or stopped since the 6th market day, market price is the book value as of the nearest date of balance sheet.
In 2016, the fair value principle was not allowed to apply by the Law on Accounting. Therefore, the securities were re-valuated when the price reduction was available against the historical price.
2. Recording principle and accounting method on recording the value of revaluating the investments at market
price or fair value
-
-
-
-
-
-
-
1. Principle of recording the tangible and intangible ixed assets
Tangible and intangible ixed assets are initially recognized at their cost. Subsequently, the total costs of these ixed assets comprise their historical costs and accumulated depreciation and residual value.
2. Method of depreciating the tangible and intangible ixed assets
Depreciation of ixed assets is calculated under straight line method in accordance with the expected useful life. Concretely:
Plants and equipment 03 - 07 years
Means of transportation 06 years
Others 04 years
Transaction software, accounting software 03 - 05 years
Liabilities are recoverable amount from the client or otherwise. Liabilities are calculated by book value deducting provisions for bad debts.
Provisions for bad debts are made for the overdue liabilities over 06 months, or liabilities that the debtor is unable to make payment due to liquidation, bankruptcy or similar diiculties.
Liabilities include: Receivables from the securities deals, fees of brokerage and advisory services offered to the investors, interests in-arrears for the inancial services and otherwise.
Revenue of securities deals: trade accounts receivable for depository deals, investors in securities brokerage service charge, securities depository charges, etc.
Loans
Loans are followed for each lender, each acknowledgment of debt and loan term of the concerned loans and inancial leases. In case of foreign currency loans and debts, the detailed original currency follow-up is applied.
Issued bonds
Book value of the bonds is generally relected on net basis, equal to the bond value in accordance with the face value deducting the bond discount plus the bond surplus.
The discount and surplus are monitored for each normal bonds and allocation of each discount and surplus when the loan expenses are determined to be included into the costs or capitalized from time to time, concretely:
Bond discount is gradually allocated to loan expenses from time to time during the bond term.
Bond surplus is gradually allocated to deduct the loan expenses from time to time during the bond term.
Principle of recording and depreciating fixed assets
Principle and method of short-term and long-term receivables
Principle and method of short-term and long-term liabilities
FINANCIAL STATEMENTS
175174
ANNUAL REPORT 2016
Allocation of discount or surplus may be applied with the effective interest method or straight line method:
Under the effective interest method: Discount or surplus allocated to each period shall be calculated by difference between the payable loan expense for each interest payment period (calculated by opening book value of bonds multiplied with the effective interest rate in the market) with the payable amount from time to time.
Under the straight line method: Discount or surplus is evenly allocated during the bond’s term.
Financial asset loans
Financial asset loans must be followed-up with the principal details and re-valuated on the date of loan repayment operation under the loan term of each loan. Differences in increase or decrease on the loan obligation on the date of loan repayment or the end of the inancial year are recorded into the inancial expenses or inancial revenue of the inancial year. Re-valuation of inancial asset loans must be well matched with the market price on the date of re-valuating such assets.
Loan from Financial Support Fund
Loan from Financial Support Fund includes the Company’s loans from the Payment Support Fund in addition to the contributions of the Company’s fund.
Such loan must be monitored against the loan amount, paid amount (principal and interest amount), remaining amount by each borrower, loan agreements, Acknowledgment of Debt by each loan term.
Loan repayment capacity must be periodically evaluated from the contribution to the Payment Support Fund of other members.
Payables to securities deals
Fees payable to the securities service providers are determined in accordance with the implemented deal volume and price agreed between the service provider and the Securities Company. Payables to securities deals are recorded in accordance with the principle of committing service supply to the clients in accordance with the realized revenue for the company’s licensed business operations.
Payables to securities issuers
Payables to securities issuers include payables to the securities issuers regarding proceeds from selling warranty guarantee securities covered by the company in the main or auxiliary securities issuers, including those involving in sales of issued securities through the agents.
The chartered capital is recorded as the actual contributed capital of the shareholders, at least equal to the legal capital as prescribed by the laws in accordance with the licensed operations, including the operations to be supplemented as approved by the State Securities Commission.
Share premium: Refers to the difference due to sales of issued shares and re-issuance of treasury shares.
Treasury shares refer to the shares issued and reacquired by the Company. Treasury shares are recorded in accordance with the effective value and presented in the Balance Sheet as an items reducing the owner’s equity.
Retained proit after tax relects the operating results (P/L) after CIT and proit distribution or loss settlement of the Company. Retained proit after tax may be distributed to the investors as per pro-rata after the approval is released by the General Shareholders’ Meeting/ Board of Directors and the funds are made as prescribed by the Articles of Association and the regulations of the Vietnam laws.
Investment into inancial tools
Revenue from investment into inancial tools include: Interest from inancial assets recorded at FVTPL, HTM, loans and receivables, inancial assets available for sales (AFS) records the difference in selling the Company’s inancial assets (recorded in accordance with the securities clearing result notice of the securities depository center) and earnings per share, bond interest, income from the inancial assets (earnings per share is recorded in the comprehensive income statements) in accordance with the notice on proit distribution of entities having shares held by the Company, bond investment interest and interest from capital contribution to joint ventures and ailiates to be recorded into the comprehensive income statements on the accumulated basis).
Securities brokerage activities for the investor
Revenue from securities brokerage activities is recorded in the Comprehensive Income Statement when 04 conditions are satisied as follows:
Revenue is reliably determined;
It is possible to gain economic beneits from such transactions;
Principle and method of recording owner’s equity
The completed works are determined as of the date of the Financial Statements;
Accruals are determined for such transaction and costs for completing such service supply.
Securities underwriting, securities issuance agent
Revenue from securities underwriting and securities issuance agent is recorded in the Comprehensive Income Statement when the notice on securities underwriting results is released.
Principle and method of recording revenue and income
FINANCIAL STATEMENTS
177176
ANNUAL REPORT 2016
Financial revenue
Revenue is originated from the interest, royalties, dividend, distributed proit and other inancial revenues to be recorded when two (02) conditions are simultaneously satisied:
It is possible to gain economic beneits from such transactions;
Revenue is reliably determined.
Financial expenses
The costs are recorded into the inancial expense, including: interest expenses;
Loan expenses;
Others: The above items are recorded in accordance with the total accruals in the year, not set off with the inancial revenue.
Current CIT costs are determined in accordance with the taxable income and the current tax rate.
Principle of recording financial revenue, financial expenses
Principle and method of recording Current Corporate Income Tax (CIT)
Advisory activities
Revenue from advisory activities is recorded in the Comprehensive Income Statement when the service has been provided and the revenue is reliably determined and the accruals for the transactions and expenses for completing such service supply transaction are successfully completed.
Securities depository service
Revenue from securities depository service is recorded in the Comprehensive Income Statement when 04 conditions are satisied as follows:
Revenue is reliably determined;
It is possible to gain economic beneits from such transactions;
The completed works are determined as of the date of the Financial Statements;
Accruals are determined for such transaction and costs for completing such service supply.
Auction and trust activities
Revenue from auction and trust is recorded in the Comprehensive Income Statements when it is actually collected.
Others
Other revenue is recorded in the Comprehensive Income Statement on accumulated basis.
Revenues related to a series of accounting periods are recorded in accordance with the completion schedule or allocated by straight line during the service is provided. The non-distributed value is recorded as the unrealized revenue in the Statement of Financial Position.
FINANCIAL RISK MANAGEMENTFOR SECURITIES COMPANY
The Company’s operations result in the market risk, credit risk and liquidity risk. The Company’s overall inancial risk management policy focuses on estimating the unexpected market variations and minimizing the adverse impacts on the Company’s business performance.
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in inancial loss to the Company. The Company has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit risk is underestimated. Credit risk is available from the bank deposits, trade accounts receivable, depository transactions and inancial investments. The maximum exposure to credit risk for each inancial asset group is equal to the book value of such inancial instrument group in the Balance Sheet.
Liquidity risk refers to the risk incurred by the Company when the inancial obligations are fulilled in the capital inadequacy condition. The Company’s liquidity risk is mainly originated from the inancial assets and liabilities with different maturity.
The liquidity risk is followed up by maintaining the percent of cash and cash equivalents to the extent that the CEO thinks it is adequate to offer the inancial support for the Company’s business activities and minimize the inluence of the cash low changes.
Market risk refers to the risk that the fair value of the future cash lows in a inancial instrument to be varied by the market price luctuations. Market price is characterized by risks, namely: interest risk and other price risks, for example share price risk. The inancial instruments are affected by the market risk, including bank deposit and short-term investments. Purpose of market risk management is to manage and control the market risk within the acceptable limit while the obtainable proit is still maximized.
Market risk risk refers to the risk that the fair value of the future cash lows in a inancial instrument to be varied by the foreign exchange luctuations. Some foreign currency transactions shall be initiated, accordingly, the Company shall incur the risk in case of FX changes. The outstanding balance of foreign currency assets is properly maintained to satisfy the regular use demand and assure the due payment obligations by foreign currency amounts.
The listed and unlisted shares held by the Company are affected by the market risks, originated from the uncertainty of investment share’s future value. Risk on share price is managed by setting up the investment limit. The decisions on share investment are also considered and approved by the Board of Management. Increase (or decrease) in securities index may increase (or decrease) a respective rate against revenue from the Company’s investment activities, depending on the reduction importance and extension, as well as holding status of the portfolio for the shares signiicantly affecting the market index.
Credit risk
Liquidity risk
Market risk
Monetary risk
Other price risks
FINANCIAL STATEMENTS
179178
ANNUAL REPORT 2016
NOTES TO THE STATEMENT OF FINANCIAL POSITON
Cash and cash equivalents
Value and volume of transactions during the year
Cash on hand
Cash at banks for the operation of the Company
Cash in bank for securities trading and settlement
Cash equivalents
a. Proprietary trading
- Stocks
- Bonds
- Other securities
b. Investors’ securities
- Stocks
- Bonds
- Other securities
121,080,543
361,404,317,272
27,399,434
-
120,377,447
80,057,427
38,320,000
2,000,020
5,309,457,503
5,296,157,503
13,300,000
-
361,552,797,249
5,429,834,950
340,163,382,922
80,382,086,604,210
49,613,520
262,633,889,954
2,479,879,448
75,000,000,000
5,969,829,045,800
2,008,567,787,800
3,941,748,370,000
19,512,888,000
74,412,257,558,410
73,053,292,568,410
1,358,964,990,000
-
CLOSING BALANCE
VOLUME OF TRANSACTIONS VALUE OF TRANSACTIONS
OPENING BALANCE
ITEMS
Total
Total
Unit: VND
Unit: VND
Unit: VND
Unit: VND
Financial assets
1. Listed shares
2. Unlisted shares
3. Listed bonds
4. Unlisted bonds
5. Currency market tool
1. Margin receivables
2. Cash advance from selling securities
555,228,275,018
72,551,836,000
-
-
967,035,296,716
200,061,275,819
621,510,885,991
148,013,270,000
-
-
-
1,489,675,970,881
224,709,511,798
769,524,155,991
1,714,385,482,679
667,386,357,470
1,714,385,482,679
1,164,093,093,198
1,167,096,572,535
1,247,596,319,016
1,167,096,572,535
471,709,654,200
72,567,231,000
-
-
967,035,296,716
200,061,275,819
519,357,692,470
148,028,665,000
-
-
-
1,489,675,970,881
224,709,511,798
CLOSING BALANCE
CLOSING BALANCE
HISTORICAL COST
HISTORICAL COST
HISTORICAL COST
HISTORICAL COST
FAIR VALUE
FAIR VALUE
FAIR VALUE
FAIR VALUE
OPENING BALANCE
OPENING BALANCE
ASSETS FVTPL
LOANS AND RECEIVABLES
Total
Total
1. Financial assets at fair value through proit and loss (FVTPL)
2. Loans and receivables
FINANCIAL STATEMENTS
181180
AN
NU
AL
RE
PO
RT
20
16
3. Movem
ents in provisions for impairm
ent of inancial assets3. M
ovements in provisions for im
pairment of inancial assets (Continue)
FINANCIAL ASSETS FVTPL
Listed shares
Saigon - Hanoi Commercial Joint Stock Bank
Cement Transport Materials Joint Stock Company
Petroleum Technical Services Corporation
Ho Chi Minh City Securities Incorporation
Tu Liem Urban Development Joint Stock Company
Bamboo Capital Joint Stock Company
Tien Phong Technology Joint Stock Company
Everpia Vietnam Joint Stock Company
Other stocks
1
SHB
VTV
PVS
HCM
NTL
BCG
ITD
EVE
17,290,025
1,446,286
1,045,200
608,240
1,400,000
5,100,000
824,210
1,032,000
7,831,795
498,138,581,903
464,755,555,712
137,065,831,349
31,163,331,648
22,625,430,380
22,084,647,787
22,269,521,775
26,360,000,000
22,158,616,000
31,078,224,000
149,949,952,773
381,291,276,870
350,330,793,270
79,534,115,000
28,491,834,200
17,141,280,000
16,544,128,000
13,160,000,000
25,857,000,000
19,204,093,000
24,716,400,000
125,681,943,070
118,565,977,098
116,143,434,507
57,531,716,349
2,671,497,448
5,484,150,380
5,540,519,787
9,109,521,775
503,000,000
2,954,523,000
6,361,824,000
25,986,681,768
88,331,723,120
80,298,091,146
32,521,488,849
-
6,251,947,341
3,535,855,787
5,505,917,490
-
-
-
32,482,881,679
30,234,253,978
35,845,343,361
25,010,227,500
2,671,497,448
(767,796,961)
2,004,664,000
3,603,604,285
503,000,000
2,954,523,000
6,361,824,000
(6,496,199,911)
NO. MARKET VALUE AS AT 31/12/2016BOOK VALUEQUANTITY PROVISION AS AT
31/12/2016
BASIS OF PROVISION MADE
FINANCIAL ASSETS PROVISION AS AT 31/12/2015
PROVISION PROVIDED FOR/
REVERSED DURING THE PERIOD
inut: VND
UNIT: VND
118,565,977,098 30,234,253,97888,331,723,120 Total
2
SDI
VGC
3
4
Stock upcom loor
Sai Dong Urban Development and Investment Corporation
ViglaceraCorporation
Other stocks
Unlisted shares
Other stocks
Money market tools
1,473,590
312,000
913,500
248,090
60
60
33,381,940,191
15,300,706,009
15,597,290,000
2,483,944,182
1,086,000
1,086,000
30,960,252,600
14,976,000,000
13,976,550,000
2,007,702,600
231,000
231,000
2,421,687,591
324,706,009
1,620,740,000
476,241,582
855,000
855,000
-
7,232,776,974
7,227,772,088
-
5,004,886
855,000
855,000
800,000,000
(4,811,089,383)
(6,903,066,079)
1,620,740,000
471,236,696
-
-
(800,000,000)
FINANCIAL STATEM
ENTS
183182
ANNUAL REPORT 2016
Receivables
- Receivables from due dividend and interest income
- Other receivables
Receivables from Margin operation
Receivables from securities brokerage activities
Receivables from securities underwriting
Receivables from advisory services
Receivables from securities depository
Receivables from entrusted and auctioned activities
Receivables from inancial services provided by the Company
Receivables from other investment interests
Receivables from securities business cooperation contract
(advance, repo, …)
Receivables from advance to pay dividends
Receivables from securities trading activities
Receivables from other services
16,807,997,619
1,489,675,970,881
722,694,703,698
16,400,753,792
967,035,296,716
352,421,457,765
16,082,304,412
318,449,380
967,035,296,716
93,239,551
-
5,759,914,000
2,728,747,798
64,109,661
343,775,446,755
17,725,163,154
315,456,089,112
10,000,000,000
594,194,489
-
16,807,997,619
-
1,489,675,970,881
-
-
4,818,564,000
3,901,200,845
-
713,974,938,853
20,859,590,061
315,236,154,303
10,000,000,000
367,854,194,489
25,000,000
Total
Total
Total
Unit: VND
unit: VND
unit: VND
unit: VND
1. Receivables from
2. Margin receivables
3. Receivables from services rendered
CLOSING BALANCE
CLOSING BALANCE
CLOSING BALANCE
OPENING BALANCE
OPENING BALANCE
OPENING BALANCERECEIVABLES FROM SERVICES RENDERED
Other receivables
1,041,661,280 18,041,684
18,041,6841,041,661,280
Total
4. Other receivables
Provisions of bad receivables unit: VND
1. P
rovis
ion
for d
oubt
ful r
ecei
vabl
es
from
disp
osal
of
inan
cial a
sset
s
2. P
rovis
ion
for d
oubt
ful d
ivide
nds,
inte
rest
inco
me
rece
ivabl
es
- No.
8 In
vest
men
t and
Con
stru
ctio
n Jo
int S
tock
Com
pany
3.
Prov
ision
fo
r do
ubtfu
l in
vest
men
ts m
atur
es
4. P
rovis
ion
for o
ther
dou
btfu
l deb
ts
- R
ecei
vabl
es c
onsu
lting
ser
vice
s
- R
ecei
vabl
es
from
cus
tom
ers
on
mar
gin
trad
ing
- R
ecei
vabl
es f
rom
mar
gin
cont
ract
- O
ther
rec
eiva
bles
-
820,
000,
000
820,
000,
000 -
342,
792,
076,
886
330
,00
0,0
00
16,9
10,9
03,5
33
291,
120
,402
,719
34
,43
0,7
70,6
34
-
574,
000,
000
574,
000,
000 -
275,
006,
323,1
01
330
,00
0,0
00
11,0
75,5
76,9
03
249,
032,
54
0,2
09
14,5
68,2
05,9
89
-
246,
000,
000
246,
000,
000 -
6,150
,349
,173 - -
2,03
2,98
8,2
68
4,1
17,3
60,9
05
- - - -
1,674
,990
,888
-
303
,935
,96
4
998
,43
4,9
48
372,
619,
976
-
820,
000,
000
820,
000,
000 -
279,
481,6
81,3
86
330
,00
0,0
00
10,7
71,6
40
,939
250
,067
,093
,529
18,3
12,9
46
,918
REV
ERSA
LA
DD
ITIO
N
CLO
SIN
G B
ALA
NC
E
OPE
NIN
G B
ALA
NC
EC
LOSI
NG
BA
LAN
CE
DO
UBT
FUL
DEB
TSTH
E VA
LUE
OF
BAD
REC
EIVA
BLES
CO
LLA
TE
34
3,6
12,0
76,8
86
275
,58
0,3
23
,101
6,3
96
,349
,17
31,
674
,99
0,8
88
28
0,3
01,6
81,3
86
To
tal
CLOSING BALANCE OPENING BALANCE
FINANCIAL STATEMENTS
185184
ANNUAL REPORT 2016
Inventories
Prepaid expenses
Deposit to settlement support fund
- Raw materials
- Tools and supplies
a. Short-term prepaid expenses
- Used tools & equipment awaiting for allocation
- Expense for repairing large ixed assets awaiting allocation
- Other prepaid expenses
b. Long-term prepaid expenses
- Used tools & equipment awaiting for allocation
- Expense for repairing large ixed assets awaiting for allocation
- Consultant expense waiting for allocation
- Other long-term prepaid expenses
- Initial deposit
- Additional deposit
- Interests earned
62,722,107
76,533,000
702,885,409
7,942,584
-
694,942,825
1,651,685,539
701,859,489
272,902,501
448,855,219
228,068,330
120,000,000
9,370,576,677
1,813,013,793
139,255,107
2,354,570,948
11,303,590,470
145,913,733
2,887,338,326
8,199,340,273
40,619,533
105,294,200
503,175,781
5,683,308
102,643,276
394,849,197
2,384,162,545
1,168,043,973
623,037,812
320,905,737
272,175,023
120,000,000
6,742,522,563
1,336,817,710
Total
Total
Total
unit: VND
unit: VND
unit: VND
HISTORICAL COST
Opening Balance
- Newly purchased
- Other additions
- Sold, disposed
- Other reduction
Closing Balance
ACCUMULATED DEPRECIATION
Opening Balance
- Depreciation for the year
- Other additions
- Sold, disposed
- Other reduction
Closing Balance
NET CARRYING AMOUNT
1. As at 01/01/2016
2. As at 31/12/2016
The total historical cost of tangible ixed assets was fully depreciation but still worth using is VND 11,806,182,279,
11,433,216,529
335,189,000
-
-
-
11,768,405,529
10,173,219,854
867,187,085
-
-
-
11,040,406,939
1,259,996,675
727,998,590
3,294,576,582
2,419,520,000
-
-
-
5,714,096,582
3,204,499,652
291,703,594
-
-
-
3,496,203,246
90,076,930
2,217,893,336
263,566,098
-
-
-
-
263,566,098
250,483,171
12,543,432
-
-
-
263,026,603
13,082,927
539,495
14,991,359,209
2,754,709,000
-
-
-
17,746,068,209
13,628,202,677
1,171,434,111
-
-
-
14,799,636,788
1,363,156,532
2,946,431,421
Increase, decrease in tangible fixed assets
MEANS OF TRANSPORTATION
OTHER FIXED ASSETS
TOTALITEMSMACHINERIES &
EQUIPMENT
unit: VND
CLOSING BALANCE
CLOSING BALANCE
CLOSING BALANCE
OPENING BALANCE
OPENING BALANCE
OPENING BALANCE
FINANCIAL STATEMENTS
187186
ANNUAL REPORT 2016
HISTORICAL COST
Opening Balance
- Newly purchased
- Other additions
- Sold, disposed
- Other reduction
CLOSING BALANCE
ACCUMULATED DEPRECIATION
Opening Balance
- Depreciation for the year
- Other additions
- Sold, disposed
- Other reduction
Closing Balance
NET CARRYING AMOUNT
1. As at 01/01/2016
2. As at 31/12/2016
The total historical cost of intangible ixed assets was fully depreciation but still worth using is VND 19,122,517,819,
20,675,056,987
295,000,000
-
-
-
20,970,056,987
19,739,297,543
655,427,907
-
-
-
20,394,725,450
935,759,444
575,331,537
20,675,056,987
295,000,000
-
-
-
20,970,056,987
19,739,297,543
655,427,907
-
-
-
20,394,725,450
935,759,444
575,331,537
Increase, decrease in intangible fixed assets
TRANSACTIONAL SOFTWARE, ACCOUNTING SOFTWARE TOTALITEMS
unit: VNDThe company’ financial assets listed/registered for trading at the Vietnam Securities Depository
The company’ financial assets registered but not trading at the Vietnam Securities Depository
- Transferable inancial assets
- Limited trading inancial assets
- Collateralized inancial assets
- Blocked inancial assets
- Financial assets to be settled
- Transferable inancial assets
- Limited trading inancial assets
- Not traded, pledged inancial assets
215,103,760,000
-
205,000,000,000
-
253,600,000
1,500,600,000
-
-
420,357,360,000
1,500,600,000
524,280,740,000
1,500,600,000
324,996,740,000
-
197,300,000,000
-
1,984,000,000
1,500,600,000
-
-
FINANCIAL ASSETS
FINANCIAL ASSETS
Total
Total
unit: VND
unit: VND
CLOSING BALANCE
CLOSING BALANCE
OPENING BALANCE
OPENING BALANCE
FINANCIAL STATEMENTS
189188
ANNUAL REPORT 2016
The Company’s financial assets which have not been registered at the Vietnam Securities Depository
The investor’ financial assets listed/registered for trading at the Vietnam Securities Depository
The investors’ financial assets registered but not trading at the Vietnam Securities Depository
Awaiting financial assets of the Investors
The Company’s inancial assets which have not been registered at the Vietnam Securities Depository
- Transferable inancial assets
- Limited trading inancial assets
- Collateralized inancial assets
- Blocked inancial assets
- Financial assets to be settled
- Transferable inancial assets
- Limited trading inancial assets
- Not traded, pledged inancial assets
- Awaiting inancial assets
83,364,940,000
10,530,745,200,000
856,068,450,000
1,388,709,090,000
32,000,000,000
260,455,010,000
8,715,090,000
-
-
482,133,670,000
83,364,940,000
13,067,977,750,000
8,715,090,000
482,133,670,000
88,400,000,000
9,014,898,770,000
1,243,918,340,000
562,857,380,000
88,400,000,000
6,562,817,160,000
497,892,740,000
1,656,739,190,000
10,000,000,000
287,449,680,000
420,783,340,000
135,000,000
823,000,000,000
562,857,380,000
FINANCIAL ASSETS
FINANCIAL ASSETS
FINANCIAL ASSETS
FINANCIAL ASSETS
Total
Total Total
Total
Total
Total
Total
unit: VND
unit: VND
unit: VND
unit: VND
Deposits of investors
Payables for securities transaction activities
Payables for dividends, bond principal and interest
- Investors’ deposits managed by the Company
Deposits of domestic investors on securities trading
under the method of securities management
Deposit of foreign investors on securities trading under
the method of securities management
- Deposit deposited securities transactions for clients
- Deposit clearing and settlement of securities transactions
Domestic investor’s deposits for clearing and settlement
of trading securities
Foreign investor’s deposits for clearing and settlement
of trading securities
- Payables to stock exchanges
- Payables to Vietnam Securities Depository (VSD)
- Payables to other organizations, individuals
- Payables for dividends, bond principal and interest to investors
- Payables for dividends to shareholders or proits for capital contributors
372,305,181,230
372,279,800,333
25,380,897
271,759,124,500
-
-
-
172,015,449,511
171,983,224,573
32,224,938
300,114,855,189
12,556,401,811
12,515,227,234
41,174,577
3,129,100
377,998,000
6,417,023,935
214,926,900
297,388,049
644,064,305,730
6,798,151,035
512,314,949
484,686,706,511
8,924,818,000
402,460,699
8,875,588,000
49,000,000
230,000
95,437,250
307,023,449
unit: VND
unit: VND
unit: VND
CLOSING BALANCE
CLOSING BALANCE
CLOSING BALANCE
CLOSING BALANCE
CLOSING BALANCE
CLOSING BALANCE
CLOSING BALANCE
OPENING BALANCE
OPENING BALANCE
OPENING BALANCE
OPENING BALANCE
OPENING BALANCE
OPENING BALANCE
OPENING BALANCE
FINANCIAL STATEMENTS
191190
ANNUAL REPORT 2016
Taxes payable to State Treasury
Accrued expenses
Trade payables
Other payables
- Personal income tax
- Value addex tax
a. Short-term
- Interest expenses and bonds
- Other expenses
b. Long-term
- Bond interest payable
Long-term trade payables
Other long-term trade payables
Short-term
- Payables for dividends to shareholders
- Payables for personal income tax to employees
- Payables for odd lot stock
- Payables for market analysis fee and looking for customers
- Other payables
8,041,969,873
306,368,186
22,680,855,554
18,252,675,510
4,428,180,044
21,333,661,111
21,333,661,111
14,025,690
14,025,690
7,783,643,631
297,388,049
-
-
-
7,486,255,582
8,348,338,059
44,014,516,665
14,025,690
7,783,643,631
5,895,495,290
19,209,289,024
14,025,690
1,826,620,441
5,474,234,324
421,260,966
5,341,400,135
4,678,206,102
663,194,033
13,867,888,889
13,867,888,889
14,025,690
14,025,690
1,826,620,441
307,023,449
113,805,046
4,612,354
1,022,778,847
378,400,745
Total
unit: VND
unit: VND
unit: VND
unit: VND
Short term borrowings and liabilities
Long-term issued bonds
Bank loans (*)
Saigon - Hanoi Commercial Joint Stock Bank – Tay Nam Ha Noi Branch
Orient Vietnam Commercial Joint Stock Bank - Hanoi Branch
An Binh Commercial Joint Stock Bank - Hanoi Branch
Petrolimex Petroleum Commercial Joint Stock Bank – Hanoi Branch
Vietnam Joint Stock Commercial Bank for Investment and Development – Ha Thanh Branch
Issued bonds
- Tien Phong Commercial Joint Stock Bank (a)
- Vietinbank Fund Management Co.,Ltd (b)
- Vietinbank insurance one member Co.,Ltd
1,905,628,811,511
786,000,000,000
113,500,000,000
117,000,000,000
40,000,000,000
849,128,811,511,00
503,500,000
386,000,000
37,500,000,000
80,000,000,000
-
-
920,000,000,000
670,000,000,000
250,000,000,000
_
370,000,000,000
140,000,000,000
170,000,000,000
60,000,000,000
517,000,000,000
400,000,000,000
55,000,000,000
42,000,000,000
20,000,000,000
580,000,000,000
460,000,000,000
120,000,000,000
-
8,5%
8,1%
7,5%
8,0%
6,0%
8,2% to 9.3%
8.5% to 9.3%
8,2%
8,5%
1,892,128,811,511
772,000,000,000
96,000,000,000
155,000,000,000
20,000,000,000
849,128,811,511
710,000,000,000
350,000,000,000
300,000,000,000
60,000,000,000
1,905,628,811,511
370,000,000,000
1,892,128,811,511
710,000,000,000
517,000,000,000
580,000,000,000
(*): As at 31 December 2016, the Company has short term loans with term of 3 months to 12 months to supplement working capital at interest rate from 6% / year to 8,5% / year, The collateral for these loans is unlisted shares with a value at the valuation time of VND 568,194,826,000, The listed shares are valued at VND 344,604,500,000 at the valuation time,
(a): Issued bonds bought by Tien Phong Commercial Joint Stock Bank is unconvertible bonds, free transfer, no collateral; at a term of 02 years, the ixed interest rate in the irst 6 months is from 8,5% / year to 9,3% / year, The next six-month loating period with the minimum interest rate is equal to the average of the four interest rates applied to VND savings deposits applicable to individuals, 12-month term, the end of the period is announced at the transaction oices of four commercial banks in Hanoi including Vietnam Joint Stock Commercial Bank for Investment and Development, Vietnam Joint Stock Commercial Bank for Foreign Trade of Vietnam, Vietnam Joint stock Commercial Bank for Industry and Trade, Saigon - Hanoi Commercial Joint Stock Bank at the date of determination of interest rate at the time of adjustment plus (+) margin of 2% - 3,0% per annum,
(b): Issued bonds bought by Vietinbank Fund Management Co,,Ltd, is unconvertible bonds, no collateral; at a term of 02 years, the ixed interest rate in the irst 6 months is 8,2%/ year, The next six-month loating period with the minimum interest rate is equal to the average of four interest rates applicable to VND savings deposits applicable to individuals, 12-month term, The end of the period is announced at the transaction oices of four commercial banks in Hanoi, including Bank for Investment and Development of Vietnam, Joint Stock Commercial Bank for Foreign Trade of Vietnam, Vietnam Joint Stock Commercial Bank for Industry and Trade, Bank for Agriculture and Rural Development of Vietnam at the date of determination of the interest rate at the time of adjustment plus (+) margin of 1,5% / year
503,500,000,000
920,000,000,000
OPENING BALANCE
OPENING BALANCE
ADDITION DURING THE
YEAR
ADDITION DURING THE YEAR
REPAYMENT DURING THE
YEAR
REPAYMENT DURING THE YEAR
INTEREST RATE %/
YEAR
INTEREST RATE %/
YEAR
CLOSING BALANCE
CLOSING BALANCE
SHORT-TERM BORROWINGS
ITEMS
unit: VND
unit: VND
CLOSING BALANCE
CLOSING BALANCE
CLOSING BALANCE
CLOSING BALANCE
OPENING BALANCE
OPENING BALANCE
OPENING BALANCE
OPENING BALANCE
Total
Total
Total
Total
Total
FINANCIAL STATEMENTS
193192
ANNUAL REPORT 2016
Payables for investor
Undistributed profit
Notes of off-balance sheet items
1. Payables for investor – Investors’ deposits for
securities trading managed by the Company
1.1 Domestic investors’
1.2 Foreign investors’
3. Payables for investor – Investors’ deposits for clearing
and settlement of trading securities
3.1 Domestic investors’
3.2 Foreign investors’
4. Investors’ other payables
4.1 Domestic investors’
4.2 Foreign investors’
- Realized proit
- Stocks
372,305,181,230
372,279,800,333
25,380,897
271,759,124,500
271,759,124,500
-
214,926,900
214,926,900
-
97,060,321,36
1,500,000,000
172,089,799,844
171,492,181,833
597,618,011
312,671,257,000
312,671,257,000
-
95,437,250
95,437,250
-
12,745,132,112
1,500,000,000
644,279,232,630
97,060,321,367
1,500,000,000
484,856,494,094
12,745,132,112
1,500,000,000
1. Certiicates are held in custody
- Stocks
- Type < = 1 year;
- Type > 1 year.
- Type < = 1 year;
- Type > 1 year.
- Type < = 1 year;
- Type > 1 year.
Deposits of investors on securities brokerage activities
Investors’ deposits managed by the Company
15,036,660,000
-
215,103,760,000
-
1,000,000,000,000
-
83,364,940,000
644,064,305,730
644,064,305,730
15,936,660,000
-
324,996,740,000
1,550,000,000
998,450,000,000
-
88,400,000,000
484,761,056,844
484,761,056,844
15,936,660,000
324,996,740,000
1,000,000,000,000
88,400,000,000
484,761,056,844
15,036,660,000
215,103,760,000
1,000,000,000,000
83,364,940,000
644,064,305,730
4. Listed securities deposited at VSD
3. Outstanding shares
2. Mortgaged assets
5. Unlisted securities of securities companies
6. Deposits of investors
unit: VND unit: VND
unit: VND
unit: VND
unit: VND
unit: VND
unit: VND
unit: VND
CLOSING BALANCE CLOSING BALANCE
CLOSING BALANCE
CLOSING BALANCE
CLOSING BALANCE
CLOSING BALANCE
CLOSING BALANCE
CLOSING BALANCE
OPENING BALANCE OPENING BALANCE
OPENING BALANCE
OPENING BALANCE
OPENING BALANCE
OPENING BALANCE
OPENING BALANCE
OPENING BALANCE
Total
Total
Total
Total
Total
Total
Total
Total
FINANCIAL STATEMENTS
195194
ANNUAL REPORT 2016
NOTES TO THE INCOME STATEMENT
Income
unit:
VND
List
ed s
hare
s
Unlis
ted
shar
es
List
ed b
onds
Unlis
ted
bond
s
Curre
ncy
mar
ket t
ool
Fund
cer
tiica
tes
Unlis
ted
deriv
ative
in
vest
men
ts
Inve
stm
ent l
oans
Inve
stm
ents
take
m
ortg
ages
Othe
r in
ancia
l ass
ets
1 2 3 4 5 6 7 8 9 10
38,0
39,2
88
5,88
8,37
6
19,16
0,100
516,
700
900,
000
2,00
0,02
0 - - - -
27,5
79
19,5
59
108,
949
7,193
,197
2,112
,146
9,756
- - - -
1,049
,077
,258
,800
115,1
69,0
34,8
89
2,08
7,476
,041
,400
3,71
6,72
4,89
1,071
1,900
,931,6
66,6
66
19,5
12,8
88,0
00
- - - -
988,
412,
549,
877
79,5
31,61
6,00
0
2,06
6,46
4,98
3,72
9
3,70
0,908
,687
,071
1,900
,000
,000
,000
20,0
00,19
2,00
0 - - - -
60,6
64,70
8,92
3
35,6
37,41
8,88
9
21,0
11,0
57,6
71
15,8
16,2
04,0
00
931,6
66,6
66
(487
,304
,000
) - - - -
6,73
9,88
0,85
0
94,3
05,0
03,0
56
- - - - - - - -
INTE
REST
, (L
OSS
) O
F SE
CU
RITI
ES S
OLD
TH
IS Y
EAR
THE
WEI
GH
TED
A
VER
AG
E C
OST
PR
ICE
UN
TIL
THE
END
O
F TH
E TR
AD
ING
D
AY
TOTA
L SA
LE
VALU
E
INTE
REST
, (L
OSS
) O
F SE
CU
RITI
ES
SOLD
IN
TH
E PR
EVIO
US
YEA
R
INV
ESTM
ENTS
NO
.SE
LL N
UM
BER
PRIC
E
8,8
88
,891
,78
0,8
268
,75
5,3
18,0
28
,67
713
3,5
73
,75
2,1
4910
1,0
44
,88
3,9
06
To
tal
- Interest income from demand deposits
- Interest expenses
- Other inancial expenses
- Expenses for brokerage services
- Expenses for underwriting and issuance agent services
- Expenses for securities investment consulting services
- Expenses for securities custodian services
- Expenses for inancial advisory activities
- Expenses for other activities
- Expenses for lease and use of assets
- Expenses for paying principal, bond interests and dividends to the issuing organization
- Other service expenses
- Expenses for prevention and treatment of bad receivable losses in the provision of securities services
2,612,471,651
135,071,212,226
120,000,000
100,057,158,050
1,926,937
2,151,467,680
7,604,634,235
10,936,578,377
10,760,126,174
-
-
-
4,721,358,285
1,913,871,068
69,854,247,042
-
59,708,145,650
-
6,319,233,067
5,792,220,722
8,774,238,034
4,670,779,864
-
-
-
19,425,373,428
1,913,871,068
69,854,247,042
104,689,990,765
2,612,471,651
135,191,212,226
136,233,249,738
CURRENT YEAR
CURRENT YEAR
CURRENT YEAR
PREVIOUS YEAR
PREVIOUS YEAR
PREVIOUS YEAR
Total
Total
Total
unit: VND
unit: VND
unit: VND
Financial income
Financial expenses
Expense for services rendered
FINANCIAL STATEMENTS
197196
ANNUAL REPORT 2016
Expenses for salaries and other wages
Social insurance, health insurance, Union funds, unemployment insurance
Expenses for oice supplies
Expenses for tools
Depreciation expenses of ixed assets, real estate investment
Taxes, duties and fees
Expenses of outsourced services
Other expenses
- Gain from sold, disposed of ixed assets
- Other income
- Loss from sold, disposed of ixed assets
- Other expenses
22,288,745,231
687,369,060
443,771,898
371,189,592
762,526,646
87,891,817
5,500,876,272
5,266,266,922
-
45,639,961
-
2,591,200
18,924,990,895
700,302,250
593,054,999
276,963,891
799,904,719
454,273,572
5,053,948,822
5,025,393,467
3,545,455
71,869,182
13,117,763287,862,048
31,828,832,615
75,414,637
300,979,811
35,408,637,438
45,639,961
2,591,200
Total
Total
Total
General and Administration expenses
Other income
Other expenses
unit: VNDCurrent Corporate Income Tax (CIT) expenses
- Accounting proit before tax
- Adjustments to increase to determine taxable income
- Adjustment decreases to determine taxable income
Dividends received in the year
Transfer losses in previous years this year
- Taxable income
- Corporate income tax rate
In the year, no amount was held but unused and no cash-based transactions affected the Cash Flow Statement.
86,589,702,467
-
86,589,702,467
16,112,324,600
70,477,377,867
-
20%
118,238,079,262
-
118,238,079,262
22,396,644,600
95,841,434,662
-
22%
--Corporate income tax on taxable income of current year
NOTES TO CASH FLOW STATEMENT
CURRENT YEAR CURRENT YEAR
CURRENT YEAR
CURRENT YEAR
PREVIOUS YEAR PREVIOUS YEAR
PREVIOUS YEAR
PREVIOUS YEAR
unit: VND
unit: VND
unit: VND
FINANCIAL STATEMENTS
199198
ANNUAL REPORT 2016
IX. SUPPLEMENTS TO THE STATEMENT ON CHANGEIN OWNER’S EQUITY
OTHERS
Dividend was proposed or released after the date of Financial Statements but before the Financial Statements were allowed to release.
Dividend of accumulated preference shares were not recorded
Income and cost, proit or loss are directly recorded in the equity resources
In the year, there is no material event to be presented or disclosed in the Financial Statements after 31st December 2016 till the date of this report as conirmed by the Board of Management.
The key managers and related individuals comprise of: members of Board of Directors, Board of Management, Chief Accountant and close family members of such individuals.
Income of the key managers is described as follows:
No supplements were available
No supplements were available
No supplements were available
REMARKSITEMS
Events arisen after the date of finishing the financial year
Supplements to the Statement on Change in Owner’s Equity
Details of stakeholders
1. Transactions with key managers and related individuals
Income of the Board of Management and Board of Directors
10,857,908,886 8,573,273,962
8,573,273,96210,857,908,886Total
unit: VND
The Company’s stakeholders include:
Operations arisen in the year between the Company and other stakeholders are shown as follows:
As of the date of inishing the inancial year, the liabilities with other stakeholders are shown as follows:
2. Transactions with other stakeholders
SaiGon - Ha Noi Insurance Corporation
SHB
and Chairman of Board of Directors
and Chairman of Board of Directors
RELATIONSTAKEHOLDER
SHB
Loan expenses
Share-based dividend (quantity)
Loan undertaking in the year
Loan repayment in the year
45,039,851,630
-
772,000,000,000
786,000,000,000
48,597,302,336
1,052,207
1,115,000,000,000
1,115,000,000,000
unit: VND
SHB
- Share investment
SHB
Short-term loans
137,065,831,349
137,065,831,349
386,000,000,000
386,000,000,000
137,065,831,349
137,065,831,349
400,000,000,000
400,000,000,000
147,757,831,349
400,000,000,000
147,757,831,349
386,000,000,000
Total
Total
unit: VND
CURRENT YEAR
CURRENT YEAR
CURRENT YEAR
PREVIOUS YEAR
PREVIOUS YEAR
PREVIOUS YEAR
FINANCIAL STATEMENTS
201200
ANNUAL REPORT 2016
Sectional details are presented in accordance with the business ield and geographic area. The main sectional report is based on business ield. The main sectional report is based on the geographic area.
Sectional details
The Company’s main business segments include: Securities brokerage, transaction, self-business, advisory and depository and otherwise.
Information about business performance, ixed assets and other long-term assets and value of the non-cash signiicant costs of the sector by the Company’s business line is shown as follows:
1. Business Segments:
THIS YEAR
Net proit from external sales
Net proit from internal sales
Allocated costs
Operating proit
Total accruals to acquire ixed assets and other long-term assets
Closing balance of this year
Sectional assets
Undistributed assets
TOTAL ASSETS
Liabilities
Undistributed liabilities
TOTAL LIABILITIES
50,896,188,112
-
16,274,287,951
34,621,900,161
274,261,725
15,338,336,465
15,338,336,465
3,315,668,126
3,315,668,126
180,426,308,146
-
169,285,788,971
11,140,519,175
972,254,158
2,575,015,578,590
2,575,015,578,590
2,088,926,724,812
2,088,926,724,812
218,971,157,497
-
186,550,560,942
32,420,596,555
1,179,958,846
696,217,496,708
696,217,496,708
99,884,691,44
99,884,691,444
115,656,855,552
-
107,293,217,737
8,363,637,815
623,234,271
27,806,405,727
27,806,405,727
8,764,786,877
8,764,786,877
565,950,509,307
-
479,403,855,601
86,546,653,706
3,049,709,000
3,314,377,817,490
-
3,314,377,817,490
2,200,891,871,259
-
2,200,891,871,259
TREASURY AND CUSTOMER SERVICE
SECURITIES BROKERAGE,
TRANSACTION
SELF-BUSINESS ACTIVITIES
SECURITIES UNDERWRITING AND ADVISORY
TOTAL
2. The geographic area: The Company launches business in the following geographic areas: the North, the Central and the South Regions.
Net proit from external sales
Sectional assets
Total accruals to acquire ixed assets and other long-term assets
62,337,226,239
317,136,253,444
-
494,415,999,246
2,923,005,875,714
3,049,709,000
565,950,509,307
3,314,377,817,490
3,049,709,000
9,197,283,822
74,235,688,332
-
THIS YEAR THE NORTHTHE CENTRAL
REGION THE SOUTH TOTAL
Fair value of financial assets and liabilities
CLOSING BALANCE CLOSING
BALANCE
BOOK VALUE FAIR VALUE
BOOK VALUE PROVISION PROVISION BOOK VALUE
OPENING BALANCE OPENING
BALANCE
Total
361,552,797,249
2,186,816,612,420
650,958,178,893
-
3,199,327,588,562
-
(275.580.323.101)
(88.331.723.120)
-
(363.912.046.221)
340,163,382,922
1,548,125,274,306
1,247,596,319,016
-
3,135,884,976,244
-
(280,301,681,386)
(118,565,977,098)
-
(398,867,658,484)
361,552,797,249
2,467,118,293,806
769,524,155,991
-
3,598,195,247,046
Financial asset
- Cash and cash equivalents
- Trade accounts receivable, securities transactions receivable, loan receivable and others
- Financial assets recorded at fair value through proit or loss (“FVTPL”)
- Long-term investment
340,163,382,922
1,272,544,951,205
1,159,264,595,896
-
2,771,972,930,023
unit: VND
unit: VND
,
FINANCIAL STATEMENTS
203202
ANNUAL REPORT 2016
Financial liabilities
Financial loans and debts
Issued bonds
Payables to seller, payables to securities transactions, others
Payable costs
Payables to securities deals
Total
503,500,000,000
920,000,000,000
-
44,014,516,665
627,936,937,953
2,095,451,454,618
517,000,000,000
580,000,000,000
-
19,209,289,024
722,021,989,753
1,838,231,278,777
503,500,000,000
920,000,000,000
-
44,014,516,665
627,936,937,953
2,095,451,454,618
517,000,000,000
580,000,000,000
-
19,209,289,024
722,021,989,753
1,838,231,278,777
Liquidity risk refers to the risk incurred by the Company when the inancial obligations are fulilled in the capital inadequacy condition.
The liquidity risk is followed up by maintaining the percent of cash, bank deposits and cash equivalents to the extent that the CEO thinks it is adequate to offer the inancial support for the Company’s business activities and minimize the inluence of the cash low changes.
Maturity of the inancial liabilities is based on the expected contractual payments not to be discounted is described as follows:
Liquidity risk
CLOSING BALANCE
Financial loans and debts
Issued bonds
Other payables to seller
Payable costs
Payables to securities deals
Total
-
-
-
-
-
-
-
920,000,000,000
-
21,333,661,111
-
941,333,661,111
503,500,000,000
-
-
22,680,855,554
627,936,937,953
1,154,117,793,507
503,500,000,000
920,000,000,000
-
44,014,516,665
627,936,937,953
2,095,451,454,618
LESS THAN 1 YEAR OVER 5 YEARSOVER 1 YEAR TO
5 YEARS TOTAL
OPENING BALANCE
Financial loans and debts
Issued bonds
Other payables to seller
Payable costs
Payables to securities deals
Total
-
-
-
-
-
-
-
580,000,000,000
-
13,867,888,889
-
593,867,888,889
517,000,000,000
-
-
5,341,400,135
722,021,989,753
1,244,363,389,888
517,000,000,000
580,000,000,000
-
19,209,289,024
722,021,989,753
1,838,231,278,777
LESS THAN 1 YEAR OVER 5 YEARSOVER 1 YEAR TO
5 YEARS TOTAL CLOSING BALANCE CLOSING BALANCE
BOOK VALUE FAIR VALUE
OPENING BALANCE OPENIN BALANCE
FINANCIAL STATEMENTS
205204
AN
NU
AL
RE
PO
RT
20
16
Comparative igures refer to the disclosures in the Financial Statem
ents for the inancial year ended on 31st Decem
ber 2015 audited by AASCN. Accordingly, som
e contents have been represented in accordance with the
Com
pa
rative fig
ures
I. Cash and cash
equivalents
Cash
Total
II. Financial
investments
Short-term investments
Provision for short-term investments
Total
III. Short term
receivables
Securities deals
Trade accounts receivable
Others
Provision for bad debts
Total
BALANCE SHEET
ASSETS ASSETS
STATEMENT ON
FINANCIAL POSITION
Cash
Financial assets recorded at fair value through profit or loss
Provision for impairment of inancial assets and mortgaged assets
Services offered by the securities company
Accounts receivable
Others
Loans
Provision for impairment of receivables
750,019,877,016
750,019,877,016
1,239,465,849,016
(88,331,723,120)
1,151,134,125,896
17,293,462,574
5,759,914,000
1,521,013,919,202
(275,580,323,101)
1,268,486,972,675
265,163,382,922
265,163,382,922
1,247,596,319,016
(88,331,723,120)
1,159,264,595,896
352,421,457,765
16,400,753,792
18,041,684
1,167,096,572,535
(275,580,323,101)
1,260,356,502,675
484,856,494,094
484,856,494,094
(8,130,470,000)
-
(8,130,470,000)
8,130,470,000
Excluding investor’s
cash
Rename/re-
classiication
Rename/re-
classiication
UNDER THE CIRCULAR NO. 95/2008/TT-BTCUNDER THE CIRCULARS NO. 210/2014/TT-
BTC AND NO. 334/2016/TT-BTC DIFFERENCE
ITEMS ITEMSOPENING BALANCE OPENING BALANCE
CHANGE
regulation on preparing and presenting the Financial Statements under the Circular No. 210/2014/
TT-BTC dated 30th December 2014 and the Circular No. 334/2016/TT-BTC dated 27th Decem
ber 2017 on guiding the accounting applied for the securities com
pany. Concretely:
IV. Inventories
Inventories
Total
V. Other current assets
Short-term prepayments
Other current assets
Total
VI. . Other non-current
assets
Long-term prepayments
Payment to the payment support fund
Other non-current assets
Total
TOTAL
145,913,733
145,913,733
-
2.,982,382,097
2,982,382,097
2,887,338,326
8,199,340,273
1,822,533,535
12,909,212,134
3,185,678,483,551
Oice materials, tools and instruments
Short-term prepayments
Advance payment
Short-term mortgage, pledge, deposit, security
Long-term prepayments
Payment to the payment support fund
Long-term mortgage, pledge, deposit, security
145,913,733
145,913,733
503,175,781
2,979,632,097
2,750,000
3,485,557,878
2,384,162,545
8,199,340,273
1,822,533,535
12,406,036,353
2,700,821,989,457
-
-
(503,175,781)
(503,175,781)
503,175,781
-
-
503,175,781
484,856,494,094
Reclassiication
Rename/re-
classiication
Reclassiication
Rename/re-
classiication
FINANCIAL STATEM
ENTS
207206
AN
NU
AL
RE
PO
RT
20
16
I. Short-term liabilities
Trade payables
Advance from customers
Payable costs
Others
Dividend, principal and interest payables
Total
II. Non-current liabilities
Other non-current liabilities
Total
SHORT-TERM LIABILITIES SHORT-TERM LIABILITIES
Short-term trade payables
Short-term advance from customers
Short-term payments
Others
Short-term deposits received
Employee beneits
Other non-current liabilities
Long-term payments
14,025,690
851,000,000
19,209,289,024
1,198,688,975,777
95,437,250
1,218,858,727,741
25,000,000
25,000,000
-
851,000,000
5,341,400,135
1,826,620,441
711,270,551,312
855,747,180
720,145,319,068
14,025,690
13,867,888,889
13,881,914,579
14,025,690
-
13,867,888,889
485,591,804,024
(760,309,930)
(498,713,408,673)
10,974,310
(13,867,888,889)
13,856,914,579
Rename/
Reclassiication/Not relecting payable deposit of investor
Rename/
reclassiication
Owner’s investment capital
Others
Financial reserve fund
Retained earnings after tax
Total
TOTAL
OWNER’S EQUITY OWNER’S EQUITY
Voting ordinary shares
Reserve fund for supplementing chartered capital
Operational risk and inancial reserve fund
Retained earnings
1,000,000,000,000
7,420,555,826
7,420,555,826
12,745,132,112
1,027,586,243,764
2,246,469,971,505
1,000,000,000,000
7,420,555,826
7,420,555,826
12,745,132,112
1,027,586,243,764
1,761,613,477,411
-
-
-
-
-484,856,494,094
Rename/
reclassiication
UNDER THE CIRCULAR NO. 95/2008/TT-BTCUNDER THE CIRCULARS NO. 210/2014/TT-
BTC AND NO. 334/2016/TT-BTC DIFFERENCE
ITEMS ITEMSOPENING BALANCE OPENING BALANCE
CHANGE
BALANCE SHEET STATEMENT ON
FINANCIAL POSITION
FINANCIAL STATEM
ENTS
20
92
08
ST
AT
EM
EN
T F
INA
NC
IAL
INCOME STATEMENT
REVENUE REVENUE
REVENUE REVENUE
INCOME STATEMENT
115,222,442,972
181,874,539,027
152,901,272,809
1,066,240,029
7,101,039,741
4,810,000,000
540,000,000
55,243,525,641
518,759,060,219
115,222,442,972
199,636,584,389
132,813,013,379
7,096,566,979
1,483,055,791
1,913,871,068
-
5,350,000,000
46,478,824,308
8,764,701,333
518,759,060,219
UNDER THE CIRCULAR NO. 95/2008/TT-BTCUNDER THE CIRCULARS NO. 210/2014/TT-BTC
AND NO. 334/2016/TT-BTC DIFFERENCE
ITEMS LAST YEAR ITEMS LAST YEAR
CHANGE
Operating costs
Total Total
Total
General and administrative
expenses
Total
TOTAL
Corporate governance
expenses
349,041,209,740
349,041,209,740
51,254,206,043
51,254,206,043
400,295,415,783
52,301,595,463
158,913,063,233
2,133,060,093
59,708,145,650
6,319,233,067
-
8,774,238,034
5,792,220,722
69,854,247,042
4,670,779,864
368,466,583,168
31,828,832,615
31,828,832,615
400,295,415,783
(19,425,373,428)
19,425.373.428
Revenue of securities brokerage
Revenue of securities investment and capital contribution
Others
Revenue of auction and trust
Revenue of securities depository
Securities underwriting revenue
Securities issuance agent revenue
Revenue of advisory service
Total
Revenue of securities brokerage
Financial assets recorded at fair value through profit or loss
Interest from loans and receivables
Revenue of securities depository
Other operating income
Revenue, dividend paid in-arrears, call deposit interest arisen in the year
Interest from financial assets available for sales
Expenses of securities underwriting, issuance agent
Revenue of securities investment advisory serviceRevenue of corporate finance advisory services
Loss on financial assets recorded at fair value through profit or lossProvisions for financial assets, loss settlement of bad debts and loss on impairment of financial assets and loan expenses
Self-operating costs
Securities brokerage costs
Securities investment advisory service costs
Securities underwriting, issuance agent costs
Corporate finance advisory service costs
Securities depository costs
Loan expenses
Others
Rename/
Rename/
211210
ANNUAL REPORT 2016
In the financial year, no activities or events are available, significantly affecting the Company's on-going activities.
Information on on-going activities
Ha Noi, 29 March 2017
General Director
Vu Duc Tien
Hà Nội, ngày 29 tháng 3 năm 2017
Prepared by
Nguyen Thi Thuy
Hà Nội, ngày 29 tháng 3 năm 2017
Chief Accountant
Tran Sy Tien
36 mm
GENERAL INFORMATION
Trading name : Saigon – Hanoi Securities Joint Stock Company
Certificate of business registration: No. 66/UBCK-GP issued on 15th November 2007 by State Securities Commission,the final amended license under the Decision No. 32/GPDC-UBCK issued on 1st December 2014by State Securities Commission.
Charter capital: V N D 1,000 BILLION
V N D 1,000 BILLIONOwner's capital:
Address: 3rd floor, Trade Union Conference Center Building, No. 1, Yet Kieu, Hoan Kiem, Hanoi.
Telephone: 84-4-38 181 888 Fax: 84-4-3 8181 688
Website: http://www.shs.com.vn
Securities code: SHS Member code: 069
STATEMENT FINANCIAL
212